The Rise of Structured Income

A guide to the strategies turning market exposure into potential income

For decades, investors have relied on fixed income as the primary asset class for generating portfolio income. But in recent years, structured income – strategies that use derivatives to reshape equity exposure into potential cash flow – has moved rapidly into the mainstream.

Historically, many of these strategies required hands-on options trading or a private banking relationship with high minimums. Today, they’re increasingly accessible through listed funds and lower-minimum notes.

The growth has been significant. Funds in Morningstar’s Derivative Income ETF category have expanded from about $3 billion in assets at the end of 2020 to more than $150 billion by early 2026, while the US market for income-oriented structured notes has grown to over $100 billion in annual issuance.¹

This white paper examines three of the most widely used structured income strategies: covered calls, call spreads, and autocallables. Each offers a different way to trade upside, downside, and income potential – from selling away some equity upside for premium income to generating higher income by taking on defined downside exposure.

At its core, structured income is about risk transfer: investors give up some upside potential or accept certain downside exposure in exchange for income from a fundamentally different source than most traditional portfolio income. The appeal is not that these strategies eliminate risk, but that they give investors another toolkit for being intentional about which risks they take and how they may be compensated.

Read the full white paper to learn how these strategies work, how investors are accessing them today, and what to consider when evaluating structured income’s role in a portfolio.

Download the full white paper →

¹ Source: Derivative Income ETF category AUM based on Morningstar / J.P. Morgan data cited in the white paper. Income-oriented structured note issuance based on Structured Retail Products (SRP) data cited in the white paper.