As the equities markets touch new heights, more conservative players don’t want to press their luck and are looking at defensive investments and related exchange traded funds to hedge against another correction.
For instance, the Guggenheim Multi-Asset Income Index ETF (NYSEArca: CVY) covers a range of alternative assets that can zig when the market zags. The ETF include exposure to dividend-paying assets like American depositary receipts, real estate investment trusts, master limited partnerships, closed-end funds and preferred shares, writes Casey Murphy for Investopedia.
Currently, CVY shows a trailing 12-month yield of 5.10% and comes with a net expense ratio of 0.66%. The ETF is flat so far this year. [Income-Generating ETFs for a Long Retirement]
Additionally, the fund spreads around its weight exposure across its 150 holdings, with the top holding International Paper Company (NYSE: IP) making up 1.2% of the underlying portfolio.
For the technical chart watchers, Murphy points out that CVY is moving in a steady uptrend, with a 100-week moving average as a key level of support. Bearish price actions have been unable to knock down the fund from falling below its support over the years.
Alternatively, investors can look to areas that have shown lower correlations to broader market moves, including real estate, healthcare and quality income stocks.