The Nationwide Nasdaq-100® Risk-Managed Income ETF (NUSI) was launched in 2019 and seeks to generate high current income through a combination of dividend income from its equity holdings and premiums earned from options trading. Its options strategy involves selling call options and buying protective put options to reduce volatility and create a net credit. By using an options collar, NUSI aims to provide downside protection while enhancing income generation.
Compared to its peers, NUSI has a moderate expense ratio of 0.68%. However, it has underperformed both QYLD and QYLG in terms of total return since inception. QYLD, which has a higher yield and more aggressive options strategy, has outperformed NUSI in both total return and price appreciation. QYLG, which has a more balanced approach with a lower net short position in options, has also outperformed NUSI in total return.
In terms of risk metrics, NUSI has the lowest Sharpe ratio among the three funds, indicating lower risk-adjusted returns. It also has the deepest maximum drawdown, implying a greater potential for losses during market downturns. QQQ, the parent index of these funds, has the highest Sharpe ratio, indicating superior risk-adjusted performance.
NUSI’s income distributions have been less predictable than those of QYLD and QYLG, making it less suitable for investors seeking a stable or growing income stream. The distributions of all three funds are heavily influenced by market conditions, and none of them provide a reliable source of income.
Overall, while NUSI employs a unique strategy to generate income, it has not outperformed its peers in terms of total return or risk-adjusted performance. Its lack of consistent income distributions and higher volatility make it less attractive for investors seeking predictable income or capital appreciation. Investors seeking high yield and volatility may prefer QYLD, while those seeking a more balanced approach with better risk-adjusted returns may opt for QYLG. For investors seeking strong risk-adjusted returns, QQQ remains the preferred choice.
