BOSTON--(BUSINESS WIRE)--Natixis Global Asset Management announced today the launch of the Gateway Equity Call Premium Fund (GCPAX), a new equity mutual fund managed by Gateway Investment Advisers, LLC. With Gateway’s experienced team, the fund seeks to generate returns similar to the equity market, but with less volatility and downside risk than a long-only stock portfolio.
“Tools like the Gateway Equity Call Premium Fund are designed to help investors curb emotional responses to volatility and enhance their ability to build and maintain durable investment portfolios for the long haul,” said David Giunta, President and CEO, Natixis Global Asset Management – U.S. Distribution. “This fund aims to help investors benefit from market gains and to help avoid the negative effects of moving in and out of the markets at the wrong time.”
The new fund employs a call-writing strategy similar to the one used by the flagship Gateway Fund (GATEX), an $8.2 billion fund that was established in 1977 with a 26-year track record utilizing its current investment strategy. The strategy of the Gateway Equity Call Premium Fund is similar to several large accounts Gateway now manages, which total more than $1 billion in assets. In addition to seeking low volatility, the new fund is managed to reduce the likelihood of capital gains distributions and maximize after-tax returns. Exchange-traded index options are given capital gains treatment, and the fund has a degree of flexibility to offset option gains with losses from stocks.
“Many investors prefer cash over uncertainty,” said Paul Stewart, President, CEO and portfolio manager for Gateway. “The new fund’s options strategy generates cash flow by taking advantage of market fear. This cash flow helps lessen the effect of losses in the long portfolio should the market slide downward.”
The Gateway Equity Call Premium Fund invests in a diversified portfolio of stocks that tracks the performance of the S&P 500 Index and is hedged with listed S&P 500 Index call options. Selling index call options trades the unknown outcome of equity market performance for a known and immediate cash flow. The cash flow can provide: 1) a positive return in a flat or slowly rising market and 2) the potential to mitigate losses in a declining market. As a result, the fund offers lower equity market beta – a measure of the risk arising from exposure to the stock market – and volatility levels. It also offers a low correlation to fixed-income benchmarks such as the Barclays U.S. Aggregate Bond Index.
The Fund’s benchmark is the Chicago Board Options Exchange (CBOE) S&P 500 Buy-Write Index (BXM℠), a benchmark index created by the CBOE in cooperation with Standard & Poor’s, which is designed to track the performance of a hypothetical buy-write strategy on the S&P 500 Index. The fund is co-managed by a team led by Mike Buckius, CFA, who is also the firm’s chief investment officer and has been with Gateway for 15 years. The other co-managers are Ken Toft, CFA, and Dan Ashcraft, CFA, who have been with the firm for 22 and five years, respectively.
RISKS
The effectiveness of the fund’s index option-based risk management strategy may be reduced if the fund’s equity portfolio does not correlate to the performance of the index underlying its option positions.
The equity portfolio also may underperform the S&P 500 Index in some periods, due to adverse stock selection and tracking error.
The value of the fund’s positions in index options fluctuates in response to changes in the value of the underlying index. Selling index call options can reduce the risk of owning stocks, but it limits the opportunity to profit from an increase in the market value of stocks in exchange for up-front cash at the time of selling the call option. Unusual market conditions or the lack of a ready market for any particular option at a specific time may reduce the effectiveness of the fund’s option strategies, and for these and other reasons the fund’s option strategies may not reduce the fund’s volatility to the extent desired.
The fund may invest in foreign securities traded in U.S. markets, including through ADRs. Foreign securities are subject to foreign currency fluctuations, higher volatility than U.S. securities and limited liquidity. Political, economic and information risks are also associated with foreign securities. Investments in emerging markets may be subject to these risks to a greater extent than those in more developed markets.
The fund may invest in real estate investment trusts (REITs). REITs are subject to certain risks, particularly those risks associated with the real estate market and mortgage investing. These risks include fluctuating property values, changes in interest rates, property taxes and mortgage-related risks.
Accordingly, the purchase of fund shares should be viewed as a long-term investment.
Before investing, consider the fund's investment objectives, risk, charges, and expenses. Visit ngam.natixis.com or call 800-225-5478 for a prospectus or a summary prospectus containing this and other information. Read it carefully.
About Gateway Investment Advisers, LLC
Gateway is a
Cincinnati-based investment management firm with a 37-year history of
low volatility equity investing and one of the industry’s
longest-running option-based risk management programs. With an inception
date in 1977, the firm’s flagship mutual fund, Gateway Fund, has one of
the longest track records for funds of its type in the industry. The
firm’s other low volatility equity offerings include closed-end funds
and an offshore fund, as well as individual, foundation, endowment,
pension and insurance accounts. Gateway’s assets under management
totaled $12.9 billion as of August 31, 2014.
About Natixis Global Asset Management, S.A.
Natixis Global
Asset Management, S.A. ranks among the world’s largest asset managers
based on assets under management.1 Its affiliated asset
management companies provide investment products that seek to enhance
and protect the wealth and retirement assets of both institutional and
individual investor clients. Its proprietary distribution network helps
package and deliver its affiliates’ products around the world.
Recognized as the #1 U.S. mutual fund family for 2013 performance in the
annual Barron’s/Lipper Fund Family Ranking,2 Natixis
Global Asset Management, S.A. brings together the expertise of multiple
specialized investment managers based in Europe, the United States and
Asia to offer a wide spectrum of equity, fixed-income and alternative
investment strategies.
Headquartered in Paris and Boston, Natixis Global Asset Management, S.A.’s assets under management totaled $930.5 billion (€679.5 billion) as of June 30, 2014.3 Natixis Global Asset Management, S.A. is part of Natixis. Listed on the Paris Stock Exchange, Natixis is a subsidiary of BPCE, the second-largest banking group in France. Natixis Global Asset Management, S.A.’s affiliated investment management firms and distribution and service groups include Absolute Asia Asset Management; AEW Capital Management; AEW Europe; AlphaSimplex Group; Aurora Investment Management; Capital Growth Management; Darius Capital Partners; Gateway Investment Advisers; H2O Asset Management; Hansberger Global Investors; Harris Associates; IDFC Asset Management Company; Loomis, Sayles & Company; McDonnell Investment Management; Mirova Asset Management; Natixis Asset Management; Ossiam; Natixis Environnement & Infrastructure Luxembourg; Reich & Tang Asset Management; Snyder Capital Management; Vaughan Nelson Investment Management; Vega Investment Managers; and Natixis Global Asset Management Private Equity, which includes Seventure Partners, Naxicap Partners, Alliance Entreprendre, Euro Private Equity, Caspian Private Equity and Eagle Asia Partners. Visit ngam.natixis.com for more information.
1 Cerulli Quantitative Update: Global Markets 2014 ranked Natixis Global Asset Management, S.A. as the 16th largest asset manager in the world based on assets under management as of December 31, 2013.
2 Barron's/Lipper 2013 one-year fund family ranking based on 64 qualifying U.S. fund companies. Each fund family must have at least three funds in Lipper's general U.S.-stock category, one world (global and international), one mixed-asset/balanced (stocks and bonds), two taxable bond and one tax-exempt bond fund. Natixis was not ranked for the 5- and 10-year periods. Past performance is no guarantee of future results.
3 Assets under management (AUM) may include assets for which non-regulatory AUM services are provided. Non-regulatory AUM includes assets which do not fall within the SEC’s definition of ‘regulatory AUM’ in Form ADV, Part 1.
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