Multi-Asset ETFs Get Some Rate Relief

With investors bidding up Treasuries this year, sending yields lower in the process, rate-sensitive , income-generating asset classes are benefiting.  The $100.1 million IYLD is the top performer this year of the three multi-asset ETFs mentioned here, indicating the fund has gotten a lift from its combined 31% weight to the iShares 20+ Year Treasury Bond ETF (NYSEArca: TLT) and iShares Mortgage Real Estate Capped ETF (NYSE: REM). IYLD, which has a 30-day SEC yield of almost 7.2%, holds 11 iShares ETFs.  [10 Unique Sources of Yield]

MDIV, which has amassed $533.8 million in assets in just 18 months of trading, is also higher on the year, cementing the notion that REITs and preferreds are fine places to be…when interest rates fall. Those asset classes combine for almost 40% of MDIV’s weight. Nearly a quart of MDIV’s weight is allocated to common stocks, but a fair amount of that goes to utilities, the top sector to this point in 2014.

First Trust NASDAQ Multi-Asset Diversified Income Index Fund

Tom Lydon’s clients own shares of CVY, REM and TLT.