Investors worried about a surge in volatility as the Federal Reserve gets closer to raising interest rates should consider the Gateway Fund, said the fund’s manager Paul Stewart. The Gateway Fund’s strategy is to sell index call options on a broad-based equity portfolio and buy index put options. The calls generate cash flow for the fund, while the puts protect on the downside if the market drops significantly. Stewart said the fund offers steady returns and carries a similar risk profile to a fixed income investment. Finally, Stewart said he expects the Federal Reserve to lift rates later than September as it waits for data points to line up.
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