White Paper
Know What You Own
Understanding the Diversity of Options Strategies
The universe of Options-Based strategies continues to expand rapidly as investors explore different ways to better manage risks, generate income, or pursue other investment needs and objectives.
However, options utilization can be overwhelming with all there is to know about evaluating them, so in this paper we:
- Discuss and critique Morningstar’s new classification of option-based funds with respect to due diligence and investment selection processes.
- Assess the universe of funds within the subcategories Morningstar has created: equity hedge, defined outcome, and derivative income
- Outline the objectives, pros, cons, and risks of various passive versus active options-based strategies.