Nicholas Wealth Management Launches Fixed Income Alternative ETF

Nicholas Wealth Management has debuted the Nicholas Fixed Income Alternative ETF (FIAX). 

The actively managed fund combines exposure to short-term Treasury debt with an options premium strategy that features vertical credit and debit spreads built using options on ETFs and individual securities representing multiple asset classes. 

Investors who want yield from a diversified fixed income portfolio without incurring the duration risk from traditional fixed income instruments would find the ETF attractive. 

The Fund invests 60% to 90% of assets in short-term US Treasuries which serve to generate income and act as collateral for the fund’s options-based strategy, which accounts for the remaining 10% to 40%, according to the prospectus.  

The option spreads on ETFs and indices are linked to the performance of equities, fixed income and commodities. 

The Fund’s returns are primarily driven by the premiums received when writing options. The risk level of the spreads used by the ETF will generally vary from 1% to 3% depending on the time to expiration. 

FIAX comes with an expense ratio of 0.95% 

The fund is led by David Nicholas, Founder and President of Nicholas Wealth Management, alongside Jay Pestrichelli, co-Founder and CEO of ZEGA Financial, and Michael Venuto, CIO of Toroso Investments. 

Pictured: David Nicholas