Moreover, international government bond yields have been depressed to near zero levels, with Germany 10-year yields down 45 basis points and Japanese 10-year yields dipping into the negative territory, while yields on 10-year Treasury bonds were hovering around 1.83%. Consequently, international fixed-income investors may be steering toward higher-yielding U.S. Treasuries, which may help put a lid on rising rates in the U.S.

“This is an important development,” Koesterich added. “Even if we see an improvement in the U.S. inflation and growth outlook, we function in a global bond market. As such, ultra-low international bond yields will dampen any rebound in U.S. interest rates. This, in turn, suggests that the quest for reliable, less volatile sources of yield will continue.”

Investors who are focusing on income generation can take a look at a number of preferred stock ETF options to bolster yields. For example, the PowerShares Preferred Portfolio (NYSEArca: PGX) has a 5.89% 12-month yield, Global X SuperIncome Preferred ETF (NYSEArca: SPFF) has a 7.59% 12-month yield, First Trust Preferred Securities and Income ETF (NYSEArca: FPE) has a 5.98% 12-month yield and SPDR Wells Fargo Preferred Stock ETF (NYSEArca: PSK) has a 5.37% 12-month yield.

Alternatively, investors may also consider the PowerShares Variable Rate Preferred Portfolio Fund (NYSEArca: VRP) in a rising rate environment. Variable-rate preferreds usually trade more like bonds with shorter durations, so more conservative investors may find the lower-risk profile more appealing. However, VRP comes with a lower 5.14% 12-month yield.

Max Chen contributed to this article.