Seeks to provide a combination of income and capital appreciation through investment primarily in U.S. equity securities and will attempt to reduce volatility through the sale of index call options and the purchase of index put options.
Under normal circumstances, the Fund invests in a broadly diversified portfolio of common stocks that replicates a broad based securities market index, while also selling index call options and purchasing index put options.
Writing index call options reduces the Fund’s volatility, provides steady cash flow and is an important source of the Fund’s return, although it also reduces the Fund’s ability to fully profit from increases in the value of its equity portfolio.
The Fund also buys index put options, which can protect the Fund from a significant market decline that may occur over a short period of time. The value of an index put option generally increases as the prices of the stocks constituting the index decrease, and decreases as those stocks increase in price. From time to time, the Fund may reduce its holdings of put options, resulting in an increased exposure to a market decline
The combination of the diversified stock portfolio, the steady cash flow from the sale of index call options and the downside protection from index put options is intended to provide the Fund with the majority of the returns associated with equity market investments while exposing investors to less risk than other equity investments.
Who Should Invest in this Fund
Investors who want a combination of income and capital appreciation with less volatility (as a result of the use of an index option based risk management strategy) than a traditional portfolio consisting solely of equity securities.
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in share value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any security holder that would have reduced returns. The rates of return are used only to illustrate the effects of the compound growth rate and are not intended to reflect future values of the investment fund or returns on investment in the investment fund. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.
NGAM Canada LP (the “Manager”) currently reduces or absorbs all or any portion of the management fee and/or operating expenses of the Fund and can terminate the reduction or absorption at any time. The Manager expects to continue to absorb these fees or expenses until such time as the Fund is of sufficient size to reasonably absorb all fees and expenses. The MER for the Gateway Low Volatility U.S. Equity Fund, Series A would be 2.91% if the Manager had not reduced or absorbed these expenses.
The Gateway Low Volatility U.S. Equity Fund makes extensive use of derivatives in an attempt to reduce the overall risk of its investments, and provide downside protection, although this may not be achieved.
On November 18, 2016, the Simplified Prospectus for the Gateway Low Volatility U.S. Equity Fund was amended to (i) reflect the creation of two classes of units of the Gateway Fund, the Hedged Class and the Ordinary Class, and the redesignation of Series A, H, F and I units of the Gateway Fund as Series A, H, F and I units of the Ordinary Class of the Gateway Fund; (ii) qualify for distribution Series A (Hedged) and Series F (Hedged) units of the Hedged Class of the Gateway Fund; and (iii) reflect that NGAM Canada LP will act as portfolio manager to the Gateway Fund in respect of the currency hedging strategy of the Fund, while Gateway Investment Advisers, LLC will remain as portfolio manager in respect of the rest of the Fund’s portfolio.
Gateway Investment Advisers, LLC is a wholly owned subsidiary and an affiliate of Natixis Global Asset Management, S.A.