“The bad news is that yield is expensive right now. Because rates have stayed low for a really long time and look set to stay low, investors have gotten a bit desperate and pushed up valuations of high-yielding assets to lofty heights,” the analyst said. “I believe patience will likely be rewarded down the line with buying opportunities.”
Morningstar ETF Income Portfolio:
- iShares MSCI EAFE Min Volatility (NYSEArca: EFAV): 9.7% weighting; 1.5% yield
- iShares MSCI Emerging Market Min Vol Index (NYSEArca: EEMV): 10.3% weighting; 2.3% yield
- PIMCO 0-5 Year High Yield Corporate Bond Index ETF (NYSEArca: HYS): 19.9% weighting; 5.1% yield
- PIMCO Total Return ETF (NYSEArca: BOND): 31.6% weighting; 3.5% yield
- PowerShaers S&P 500 Low Volatility (NYSEArca: SPLV): 9.6% weighting; 2.9% yield
- WisdomTree Emerging Markets Equity Income (NYSEArca: DEM): 10.3% weighting; 3.6% yield
- Cash: 8.8%
For more information on the fixed-income market, visit our bond ETFs category.
Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own DEM and BOND.