Many retirees are worried that they left the workforce without adequate retirement savings, but the Nationwide Risk-Managed Income ETF (NYSEArca: NUSI) stands ready to help fill the void.

NUSI can act as a complement to traditional equity and fixed income allocations or as the ideal protective hedge for investors with heavy exposure to technology and growth stocks because the fund is a “rules-based options trading strategy that seeks to produce high income using the Nasdaq-100 Index,” according to Nationwide.

“Millions of Baby Boomers who haven’t saved enough money to retire full time at age 65 under their current standard of living,” according to Forbes.

NUSI is an actively managed portfolio of stocks included in the Nasdaq-100 Index and an options collar. Per index rules, the fund only invests in the top 100 largest (by market cap) nonfinancial stocks listed on NASDAQ. A collar strategy involves selling or writing call options and buying put options, thus generating income to hedge some downside risk. The strategy seeks to generate high current income monthly from any dividends received from the underlying stock and the option premiums retained.

NUSI Adding to the Growing Retirement Savings Conversation

“When most people are faced with tough challenges, deep down they appreciate the truth and authenticity. Then they can make a realistic plan that addresses their situation, which will give them confidence to face the future,” reports Forbes.

With elevated income and downside protection, NUSI jives with that plan.

The Nationwide Risk-Managed Income ETF incorporates options exposure to help generate income and mitigate risk as a way to enhance total returns. Investors have long capitalized on covered call options strategies for income generation, or protective put options strategies to protect against and limit losses.

NUSI YTD Performance

NUSI incorporates both covered call and protective puts as a way to enhance income generation and protect against potential downside.

A covered call refers to an options strategy where an investor writes or sells a call option on an asset which they already own or bought on a share-for-share basis to generate income via premiums derived from the sale of the call options. However, the covered call strategy caps upside potential and provides limited downside protection, so it is ideal for investors with a neutral-to-bullish outlook.

Covered call strategies such as NUSI can potentially augment a portfolio during periods of heightened volatility. The covered-call options allow an investor to hold a long position in an asset while simultaneously writing, or selling, call options on the same asset. However, the strategy isn’t free of risk.

For more on income strategies, visit our Retirement Income Channel.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.