Article

How to enhance your portfolio with options-based income strategies

6 February 2026
Invesco
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Key takeaways

Seeks to provide consistent income

1

Our Invesco Nasdaq-100 Income Advantage UCITS ETF is designed to provide a more consistent income.

A diversified income source

2

These options-based strategies behave differently from bonds and high dividend stocks, adding a unique layer of diversification.

Reduced volatility

3

An option overlay reduces beta and can add a differentiated source of return with low correlation to equities, adding resilience to portfolios

Why consider options-based Income?

Income investors face a familiar challenge: balancing yield with risk. Traditional sources, such as dividends and bonds, are often influenced by interest rates and market cycles, making income streams less predictable.

The Invesco Nasdaq-100 Income Advantage UCITS ETF offers an alternative: an options-based income strategy that aims to provide high and consistent income while maintaining exposure to innovative companies in the Nasdaq-100 Index.

But how can it be used in a portfolio? Here are three ways our ETF can support different objectives:

Objective 1: Provide consistent income for model portfolio construction

Many income-focused strategies fluctuate with market conditions, complicating portfolio construction. Our ETF is designed to smooth these variations by actively managing the trade-offs between income, market participation, and risk mitigation.

The strategy uses a laddered approach to covered calls and cash-secured puts that adapts with the market environment. This dynamic design aims to deliver a more consistent income experience, helping investors meet defined yield targets without sacrificing exposure to growth-orientated equities.

Objective 2: Diversify income sources beyond stocks and bonds

Traditional income streams are sensitive to interest rates and central bank policy. In contrast, options-based income is driven by the level of volatility, with no interest rate risk. This creates a differentiated source of return that can complement stocks and bonds, reducing reliance on any single income driver.

By adding this ETF to a portfolio, investors can introduce an income component that behaves differently to other approaches across market cycles, enhancing diversification and potentially improving risk-adjusted returns.

Objective 3: Reduce or reallocate broad equity index exposure

Some investors may want to reduce their equity risk but still participate in the market from a total return perspective. Simply holding cash or adding more bonds may not align with long-term objectives.

The option overlay in our ETF lowers beta, providing exposure to the Nasdaq-100 while dampening volatility. Combining covered calls and cash-secured puts enables a stable beta of around 0.75 to be maintained, and allows the ETF to target a consistent yield through different to market conditions. This can make it a compelling alternative to traditional equity allocations.

One ETF, multiple advantages: Income, diversification, resilience

The Invesco Nasdaq-100 Income Advantage UCITS ETF is more than just an income solution, it’s a flexible tool for portfolio construction. By combining equity exposure with an option overlay, it seeks to deliver consistent income, diversify sources of return, and reduce risk, all within a single, innovative ETF.

Invesco Nasdaq-100 Income Advantage UCITS ETF

An investment in this fund is an acquisition of units in a passively managed, index tracking fund rather than in the underlying assets owned by the fund. Investment Risks: Click here for more information. For complete information on risks, refer to the legal documents. Invesco Nasdaq-100 Income Advantage UCITS ETF: Value Fluctuation, Equity, Equity Linked Notes, Options Risk, Use of Derivatives, Country Concentration, Securities Lending.

Related insights

  • Investment risks

    For complete information on risks, refer to the legal documents.

    Value Fluctuation: The value of investments, and any income from them, will fluctuate. This may partly be the result of changes in exchange rates. Investors may not get back the full amount invested.

    Equity: The value of equities and equity-related securities can be affected by a number of factors including the activities and results of the issuer and general and regional economic and market conditions. This may result in fluctuations in the value of the Fund.

    Country Concentration Risk: The Fund is invested in a particular geographical region, which might result in greater fluctuations in the value of the Fund than for a fund with a broader geographical investment mandate.

    Use of Derivatives Risk: The Fund uses derivatives as part of the Income Generation Component which is intended to provide income. However, there is no guarantee that the use of derivatives will achieve this. The Fund may forego some capital appreciation potential, while retaining the risk of loss should the price of the underlying Benchmark decline.

    Equity Linked Notes Risk: Investments in ELNs are susceptible to the risks of their underlying instruments, which could include management risk and market risk. ELNs are also subject to certain debt securities risks, such as interest rate and credit risks. An ELN investment is also subject to counterparty risk, which is the risk that the issuer of the ELN will default or become bankrupt and the Fund may not be repaid the principal amount of, or income from, its investment. ELNs may also be less liquid than more traditional investments.

    Options Risk: Options or options on futures contracts are subject to correlation risk because there may be an imperfect correlation between the options and the securities or contract markets that cause a given transaction to fail to achieve its objectives. Exchanges can limit the number of positions that can be held or controlled by the Fund or the Sub-Investment Manager, thus limiting the ability to implement the Fund’s strategies. Options are also subject to leverage risk and can be subject to liquidity risk.

    Securities lending: The Fund may be exposed to the risk of the borrower defaulting on its obligation to return the securities at the end of the loan period and of being unable to sell the collateral provided to it if the borrower defaults.

    Important information

    Data as at January 2026, unless otherwise stated. By accepting this material, you consent to communicate with us in English, unless you inform us otherwise. This is marketing material and not financial advice. It is not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication.
     
    Views and opinions are based on current market conditions and are subject to change. For information on our funds and the relevant risks, refer to the Key Information Documents/Key Investor Information Documents (local languages) and Prospectus (English)and the financial reports, available from www.invesco.eu. A summary of investor rights is available in English from www.invesco.com/ie-manco/en/home.html. The management company may terminate marketing arrangements. UCITS ETF’s units / shares purchased on the secondary market cannot usually be sold directly back to UCITS ETF. Investors must buy and sell units / shares on a secondary market with the assistance of an intermediary (e.g. a stockbroker) and may incur fees for doing so. In addition, investors may pay more than the current net asset value when buying units / shares and may receive less than the current net asset value when selling them. For the full objectives and investment policy please consult the current prospectus.

    Nasdaq® and NASDAQ-100 Index®, are registered trademarks of Nasdaq, Inc. (which with its affiliates is referred to as the “Corporations”) and are licensed for use by the Fund. The Fund has not been passed on by the Corporations as to their legality or suitability. The Fund is not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE FUND.

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