Squeezed by low interest rates on money market funds and U.S. Treasurys, investors have cast wider and wider nets over the past few years in search of yield. The yield hunt has predictably included common stocks, but investors have warmed to other asset classes with even more robust yields such as MLPs, REITS and junk bonds.
Investors that want exposure to those asset classes and others do not need to spread their accounts over multiple holdings. These days, generating income from multiple asset classes has been made easier by ETF issuers. Noticing the demand for new higher-yielding income products (and an opportunity to profit from that demand), ETF sponsors have steadily increased the number of mutli-asset income funds available to investors. [Mutli-Asset ETFs for Income]
Lipper says roughly 100 funds using multiple assets and generating income have launched since the beginning of 2010, attracting $26 billion in assets. In all, so-called multi-asset funds now hold nearly $460 billion in assets, reports Reshkma Kapadia for Barron’s.
Among ETFs, the dominate multi-asset product is the Guggenheim Multi-Asset Income ETF (NYSEArca: CVY). CVY, which has a 30-day SEC yield of 6%, is nearly seven years old and has over $1 billion in assets under management. CVY holds both domestic and international common stocks, American depositary receipts paying dividends, real estate investment trusts, master limited partnerships, closed-end funds, Canadian royalty trusts and traditional preferred stocks. [Mutli-Asset ETFs Yield Over 5%]
Investors looking for alternatives to CVY need not look far.