Investors looking to boost yield in their portfolios should consider alternate sources of income such as dividend-paying stocks and corporate debt with Treasury rates continuing to hover near all-time lows, says ETF provider BlackRock.
“The hunt for reliable investment income has never been more challenging. Interest rates on traditional ‘safe-haven’ bonds are at record lows,” the money manager says. “Money in the bank offers miniscule returns. Investors are left to wonder how to stay ahead of inflation without taking on too much risk.”
Although Treasury yields bumped higher in March, the 10-year note is yielding a paltry 2.2%.
“Attractive yields can be found in today’s markets—if you know where to look. For income that can beat inflation, investors need to look far and wide—and even consider new opportunities in familiar places,” BlackRock notes.
The firm is the largest U.S. ETF manager with over $500 billion in assets spread across its iShares funds, followed by State Street Global Advisors and Vanguard. [Vanguard Seen Passing State Street in No. 2 ETF Slot]
Russ Koesterich, iShares global chief investment strategist, this week said investors should proceed with caution on high-yield bond ETFs, which on Wednesday closed below the 50-day simple moving average for the first time since November. He prefers investment grade corporate bonds and municipals. [What High-Yield Bond ETFs are Saying About Stocks]