Fixed-income investors won’t don’t meticulously and religiously follow the slightest market shifts should consider an all-encompassing, multi-asset exchange traded fund to generate income and growth.
“Most investors are better off choosing multi-asset ETFs over individual stocks,” David Blanchett, head of retirement research at Morningstar, said in a CNBC article. “It’s very hard to build a portfolio without investment knowledge. So professionally managed funds that are diversified are better places to be.”
Paul Britt, senior analyst with FactSet Research Systems, also argued that these multi-asset ETFs make sense for those who want a way to generate yields and diversify a portfolio since these fund strategies track various dividend-paying assets so that an investor is not putting all of his or her eggs in one basket.
“All dividend-payers will still have some rate sensitivity, but you might get less sector risk, for example, as opposed to getting yield via all MLPs,” Britt said in the article.
Investors have a number of ETF options to choose from. The First Trust NASDAQ Multi-Asset Diversified Income Index Fund (NasdaqGM: MDIV) is the largest with almost $1.1 billion in assets under management and comes with an attractive 6.11% 12-month yield. Additionally, the iShares Morningstar Multi-Asset Income Index ETF (NYSEArca: IYLD) has a 5.08% 12-month yield, Guggenheim Multi-Asset Income Index ETF (NYSEArca: CVY) has a 6.27% 12-month yield, Arrow Dow Jones Global Yield ETF (NYSEArca: GYLD) has a 7.91% 12-month yield and YieldShares High Income ETF (NYSEArca: YYY) has a 9.44% 12-month yield.