As the aging bull market lumbers into its ninth year, many investors are growing concerned about the increasing chance of pullbacks in stocks – and even about the next bear market. Equity valuations are stretched, interest rates for bonds are still low and set to rise, and volatility could reappear any time. Gateway Investment Advisers manages a solution that investors have relied on for nearly 40 years: low-volatility equity investing.

Gateway Low Volatility U.S. Equity Fund’s managers invest in a stock portfolio that seeks to replicate the investments of the S&P 500®1 Index, then sell index call options to create cash flow for Fund unitholders. They also buy index put options to cushion the Fund against a severe market decline. Gateway Low Volatility U.S. Equity Fund maintains a consistent strategy, regardless of prevailing market trends.

The result is a portfolio that may make it easier to stay invested for the long run by reducing the impact of severe market swings on returns.

The Gateway strategy can help address three common investment objectives:

  1. Pursue growth with lower volatility to help smooth the ride
  2. Potentially lose less when the stock market declines
  3. Diversification for fixed income portfolios

Gateway Low Volatility U.S. Equity Fund may be particularly attractive for investors who are approaching retirement and want to retain exposure to stocks, but with less risk of loss. It may also be used as a complement to passive or actively managed stock funds due to its resilience in down markets. And with bond yields still at record lows across the globe, relying on fixed income investments alone may not be sufficient to meet a conservative or risk-averse investor’s financial goals.

Gateway Low Volatility U.S. Equity Fund’s consistent strategy and results may help investors prepare for choppier markets ahead. Learn more about how Gateway Low Volatility U.S. Equity Fund can add resiliency to a portfolio.


Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

The views and opinions expressed may change based on market and other conditions. This material is provided for informational purposes only and should not be construed as investment advice. There can be no assurance that developments will transpire as forecasted. Actual results may vary.

1 S&P 500® Index is a widely recognized measure of U.S. stock market performance. It is an unmanaged index of 500 common stocks chosen for market size, liquidity, and industry group representation, among other factors. It also measures the performance of the large cap segment of the US equities market. You may not invest directly in an index.

A call option is an agreement that allows an investor to purchase a security at a specific price within a predetermined time period.

A put option is an agreement that allows an owner of a security to sell an amount of said security at a specific price within a predetermined time period.

Risks

Equity securities are volatile and can decline significantly in response to broad market and economic conditions. Options may be used for hedging purposes, but also entail risks related to liquidity,market conditions and credit that may increase volatility.