For Your Consideration: Derivative Income ETFs

Of all the ETF trends that took off in 2024, one of the more fascinating ones is the surge in derivative income ETFs.

Oftentimes, these funds provide a blended exposure of current income and long-term equity exposure. As an added bonus, derivative income ETFs can help traders lock in yield that is diversified from the fixed income market.

A recent article from Natixis Investment Managers dug into some of the top ETF trends to keep an eye on in 2025. In the article, the experts at Natixis highlighted derivative income ETFs as one of the top three trends investors should consider for the new year.

The Natixis team observed that derivative income ETFs have seen over $80 billion in fund flows over the past few years. This is in part due to how these funds can help bolster their long-term income and returns, especially for retirees.

“Having exposure to derivatives in the convenience of an ETF simplifies life for investors and financial advisors – as they would otherwise have to build these allocations on their own by actively trading the underlying derivatives themselves,” the Natixis team noted.

Tapping into GQI’s Proven Track Record

Investors and advisors looking to build up derivative income ETF exposure may wish to consider the Natixis Gateway Quality Income ETF (GQI). GQI is an actively managed fund that provides exposure to a high-quality equity portfolio with an options overlay. The equity upside for the fund is not subject to any particular cap, letting investors better access long-term returns.

Meanwhile, the options overlay for the fund offers distinct two-pronged benefits. Along with monthly yield, GQI’s options can help mitigate the overall risk profile in the equity market.

GQI’s resounding results make the fund an overall attractive investment pick for 2025. As of December 27, 2024, the fund has a 30-day SEC yield of 7.80%. Meanwhile, GQI’s overall NAV has risen 17.18% over the last twelve months, as of December 27, 2024.

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