This ETF strategy could help risk-averse investors ride out wild market swings

The CBOE Volatility Index, different known arsenic the Wall Street's fearfulness gauge, is coming disconnected its astir volatile week since April.

For investors hesitant to thrust retired the caller chaotic swings, Invesco elder portfolio manager John Burrello sees income funds that employment options-based strategies arsenic a dependable crippled plan. His reasoning: They person much structural extortion embedded successful them.

"Options are not reliant connected the correlations of stocks with another... plus class," Burrello told CNBC's "ETF Edge" this week. "They tin person a much reliable signifier of downside protection, and besides tin connection income that's not involvement complaint sensitive."

Burrello, who serves connected Invesco's planetary plus allocation team, suggests that should service arsenic an vantage to investors due to the complaint cutting cycle. Policymakers are expected to chopped rates by a 4th constituent aboriginal this month, according to the statement connected Wall Street.

"Adding income without reliance connected the Fed is becoming much and much important. I deliberation that's driving immoderate maturation successful the space," helium noted.

Invesco's income-generated funds see Invesco QQQ Income Advantage ETF, Invesco S&P 500 Equal Weight Income Advantage ETF and the Invesco MSCI EAFE Income Advantage ETF.

So acold this year, the Invesco MSCI EAFE Income Advantage ETF has gained astir 14%, portion the firm's QQQ Income Advantage ETF is up astir 6%. They're besides up astir 2 percent implicit the past week.

Meanwhile, the Invesco S&P 500 Equal Weight Advantage ETF is virtually level for the year.

According to Burrello, there's a "very ample tailwind" for options and defined result strategies could past for galore years.

"The request themes of income and defence against equity drawdowns should ne'er spell retired of style," Burrello said.  "Those are things that each portfolio apt needs astatine immoderate constituent passim someone's life. They mightiness privation to trim hazard to equities. They besides mightiness privation to adhd income that's a diversifying source, and, again, not relying connected involvement rates."

Burrello finds the enactment income abstraction has attracted a batch of caller merchandise launches thay could marque it challenging for investors to recognize the differences.

His advice: Look for enactment income ETFs managed by institutional-grade options professionals, beware of unsustainable yields with perchance precocious fees.