high yield
Written by David, April 11th, 2012
A new exchange-traded fund (ETF) that has gained my attention for the dual way it can help you profit is the iShares Morningstar Multi-Asset Income Index Fund (IYLD). The fund specifically seeks to replicate the Morningstar Multi-Asset High Income Index, a broadly diversified index that aims to deliver high current income and long-term capital appreciation.
The Index that this fund is designed to track consists of a comprehensive set of iShares ETFs that collectively target equity, fixed income and alternative income sources. The fund’s composition is weighted toward bonds, roughly 55%, but also includes a significant percentage of equities, approximately 20%. Specifically, the holdings on April 9 featured: domestic fixed income, 45.31%; cash and collateral, 25.32%; domestic equities, 14.85%; international fixed income, 9.68%; and international equities, 4.84%. The fund’s diversification also is aided by holding 1,888 different positions.
The top five holdings in IYLD, also as of April 9, were: iShares IBoxx Corporate Bond Fund (HYG), 19.56%; iShares Barclays 20+ Year Treasury Fund (TLT), 15.38%; iShares S&P Preferred Stock Index Fund (PFF), 14.85%; iShares Dow Jones Select Dividend Index Fund (DVY), 14.80%; iShares IBoxx Investment Grade Corporate Bond Fund (LQD), 10.37%. Those funds are some of the largest and best known offered by iShares.
Written by David, February 15th, 2012
“You have to make your money work for you.”
We’ve all heard this old adage, and to be certain, it is the key to income investing success. And while the truth of this statement can’t be argued, it’s definitely a lot easier to say than to actually do.
At Fabian Wealth Strategies, we take the concept of making your money work for you very seriously. But what does it actually mean to have your money working for you, and how can we help you achieve that noble goal?
Answering these questions is what our new report, The Ultimate Income Strategy, is all about.
As a fee-only investment advisor specializing in helping clients preserve their capital while also generating the income they need to live the life they desire, we take both of these objectives extremely seriously. However, conventional Wall Street wisdom usually pits the twin objectives of capital preservation and high income generation at odds.
According to the official party line, you can either A) preserve capital by sticking your money in “safe” investments that offer a pitifully low yield, or B) put your money at risk in dividend stocks and other high-yield equities and be willing to wait out the inevitable market declines that are inherent in these kinds of securities.
Well, we think this conventional wisdom is flawed, and we know there’s a better way to manage your income assets. You see, instead of the either-or choice of safety vs. yield, we’ve developed a strategy designed to maximize income while at the same time managing the various risks inherent whenever you put money to work in the market.
We call it our “Ultimate Income Strategy,” and when you’re finished reading this report, you should have a good sense of how the strategy works, and more importantly, how it allows your money to work for you.
If you’ve been trying to generate high income but have failed to keep your money safe from volatile market swings, then this report is aimed straight at you.
In The Ultimate Income Strategy, you’ll discover why the right mix of income-generating assets—along with the expertise to navigate in and around changing market conditions—are two key components of a truly successful income program.
By downloading this FREE special report, you’ll find out the secrets of how we manage an income portfolio to deliver the capital preservation and high yield every income investor is after.
So, take the ultimate step, and download your FREE copy of The Ultimate Income Strategy today!
Written by Dani, February 15th, 2012
We’ve been blogging and podcasting for some time about the uncertainties in the market right now, and so we thought we’d expand on fixed-income strategies today.
We advise three broad investment categories for income:
- Fixed income (bonds)
- Dividend equities
- High-yield alternatives
We think that asset allocation is what makes or breaks an investment strategy, and we are advising our clients to put a high allocation of their portfolio into fixed income at this time. We have several vehicles for this and can advise you in more detail if you call our office. Please call us at 800-391-1118 for a free portfolio review.
We also believe that now is a bad time to get into dividend equities, and we are advising our clients against saddling their portfolios with over priced investment vehicles at this time. Instead of the either-or choice of safety vs. yield, we’ve developed a strategy designed to maximize income while at the same time managing the various risks inherent whenever you put money to work in the market.
Check out our special report for more information on how to invest wisely, here.
Written by David, October 12th, 2011
With markets undergoing a correction in the past few weeks, now is a good time to evaluate sectors that will outperform if we see a recovery from the near-hysteria about the sovereign debt problems in Europe. To that end, one of the best bellwethers for investor sentiment is the junk bond market. In light of the high level of risk inherent in junk bonds, improving conditions often are accompanied by a strengthening in that sector.
The iShares iBoxx $ High Yield Corporate Bond Fund is an exchange-traded fund (ETF) that lets you invest in the looming recovery of junk bonds. The fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the iBoxx $ Liquid High Yield Index, a corporate bond market index compiled by the International Index Company Limited.
HYG consists of liquid, dollar-denominated high yield corporate bonds for sale in the United States. As of Oct. 11, HYG had amassed total net assets of $8.5 billion in high yield bonds that ranged in quality from BBB+/Baa1 to CC/Ca. The fund also has produced a 30-day Securities and Exchange Commission (SEC) yield of 8.54%. In addition, HYG is very well diversified, with more than 470 different bond holdings. For example, CIT Group is HYG’s largest component, yet it only makes up 1.17% of the fund’s net assets.
The stock market’s continued volatility has led many long-term investors to look for ways to protect their capital, while still producing a good return that is fueled by an enticing yield. With the treasury market generating yields of nearly zero and the equity market still volatile, the corporate bond market is a sector that provides attractive returns from dividend payments and offers the potential for capital appreciation. While high-grade corporate bonds are a safer investment than the high-yield junk bonds, there is considerably more upside for ETFs such as HYG as the market recovers. While it may be a bit early to invest in HYG, it is an ETF to watch closely for signs that the market is stabilizing and starting to advance in earnest.
Written by David, September 01st, 2010
No doubt you have been reading the negative news on the economy. How can you not, it’s everywhere!
We just witnessed a slowdown in economic growth, and recently we saw second-quarter GDP revised downward. No doubt you have seen the downbeat news on the housing front, as overall sales and home prices are ounce again headed south. No doubt you’ve been talking to friends who are worried about the falling value of their stock portfolios, and about the direction our country is headed. And there is likely no doubt that you have your own concerns about what to do with your investment nest egg.
Well, I have good news for you! In my opinion, the world is NOT coming to an end. America will not slip back into a recession anytime soon, and a big Congressional victory by conservatives in November could set us up for a fantastic buying opportunity—if you know where to invest your money.
Throughout most of this year, I have been warning investors about the risks of owning mutual funds and about the mindless strategy of buy and hold that most stockbrokers and advisors constantly advocate. Throughout most of 2010, the best strategy has been a high cash position combined with a healthy dose of patience. Now, however, my research is pointing to opportunity.
Taking advantage of this opportunity is easy. All you have to do is join me for an informative teleseminar on Saturday, September 11, at 12:00 p.m. Pacific Time. I’m calling this seminar “The Next Big Opportunity: High Yield.”
As the title suggests, we believe there is a HUGE opportunity coming for investors seeking high-yield investments. High-yield investing comes with its own set of risks and rewards, and we’ll be focusing on these risks and rewards in this teleseminar. If you’re an investor who wants to increase the income generated from your assets, then you’ll want to join me on Saturday, September 11, at noon Pacific Time.
During this one-hour teleseminar, I will share with you these key points:
- How to build a high-yield portfolio fit for these chaotic economic times
- Which high-yield securities are appropriate for your portfolio
- How you can plan for, and protect yourself from, the bubble now forming in bonds
- How stocks are likely to perform in a slow-growth economy
In addition, you’ll also receive my complete High-Yield Watch List.
Our previous teleseminars have been very popular with radio show listeners, newsletter subscribers and Fabian Wealth Strategies clients. For this seminar we have room for just 800 attendees. This event is absolutely FREE if you attend on Saturday, September 11, at 12 p.m. Pacific Time. There will be a nominal change for listening to the replay of this event, so make sure you register for the live event by right now by clicking here.
Written by David, August 20th, 2010
Our latest high yield special report focuses on a dozen stocks and funds that are currently yielding more than 6% annually. We have broken these funds down into three high yield investment categories and included detailed descriptions about each one. In these uncertain economic times we are committed to providing investors independent, thorough and current information which can enhance their investing success.
We have carefully selected these funds as potential investment opportunities, however we urge you to do your own research and analysis to determine if they are suitable for your portfolio. At Fabian Wealth Strategies we take portfolio management very seriously. We specialize in actively managing income and growth oriented portfolios for our clients. In addition, we build strong relationships based on personal attention and service.
If you have any questions about the assets you own or strategies to increase your high yield exposure, call us right away at 800-391-1118 to schedule a free portfolio analysis.
Click here to download this special report.
Written by David, March 10th, 2010
High-yield investments include heightened risk but one way to mitigate potential fallout is through diversification. A new “fund of funds” ETF now is available that offers diversification by investing in a number of high yield closed-end funds.
PowerShares CEF Income Composite Portfolio (PCEF), just launched Feb. 19, is designed to invest in over 70 high-yield, closed end funds, with the intent of paying a lofty dividend yield. To my knowledge, this new exchange-traded fund (ETF) is the first high-yield instrument to be structured as a fund of funds.
The ETF, based on the S-Network Composite Closed-End Fund Index, is designed to invest 80% of its total assets in the securities of funds that are included in the index. The index currently consists of closed-end funds that invest in taxable, investment-grade, and fixed income securities.
The fund’s diversification across assets, strategies and managers is expected to help to mitigate specific risks. At the same time, the fund is intended to produce an average rate of distribution that is competitive with or higher than many other fixed-income investments. In addition, the ETF uses a weighting methodology that assigns greater portions of its holdings to closed-end funds that are trading at discounts.
Intra-day trading lets investors buy and sell shares of closed-end funds just as they do with other publicly traded securities. When the shares of closed-end funds trade at prices below their underlying NAVs, such funds are considered to be trading at a discount and offer investors a chance to enhance their return on investment by buying the shares at bargain prices to produce heightened yields.
If you are like me, you like bargains and high yields. This fund is supposed to give you both. Until the new ETF establishes a track record and boosts its average daily trading volume above 100,000 shares, I’ll avoid recommending it. However, if you do not mind buying a fund early in its existence, in hopes it will gain traction quickly, PCEF is an ETF that you may want to consider, especially if you like high-yield investments that offer diversification.
