A Fixed Income ETF Strategy for Investors Looking for Extra Yield

Fixed income investors looking for some extra yield should consider bond exchange traded funds featuring exposure to international markets. One idea from that group is the iShares U.S. Credit Bond ETF (NYSEArca: CRED).

CRED, which tracks the Bloomberg Barclays U.S. Credit Bond Index, turned 10 years old earlier this year. CRED currently sports a 30-day SEC yield of 3.1%, well above what investors will find on U.S. Treasuries.

Safe-haven demand for fixed-income assets returned in January as investors grew wary of the recent Trump-induced rally in equities that pushed stocks to record heights. Many waited on further clarification from President Donald Trump’s administration on policy changes to justify the heightened valuations. However, some of Trump’s actions or lack of clarity triggered some risk-off action.

While the Federal Reserve has stopped implementing accommodative measures, global central banks, like the European Central Bank and the Bank of Japan, have expanded their quantitative easing programs, pushing yields on their government debt into the negatives, which made U.S. bonds a relative bargain.