With the Federal Reserve remaining cautious on interest rates thus far, it might be dissuading investors from looking to safe-haven Treasuries or even bonds in general as a source of income. That being, said there are strategies investors can look to that incorporate fixed income with other assets to create a complementary portfolio that creates what they want–and that’s yield.
Wasmer Schroeder knows exactly what investors looking for and their strategies address the need to get strategic when it comes to their portfolios. That means allocating capital to the right mix of bonds and other assets.
That’s why the firm created strategies like the Multi Sector Income strategy (MITX) to fill that void investors may have for high yielding income in today’s challenging environment.
“Generating a sustained, elevated level of income in this secular, low interest rate environment has been a challenge for our clients,” wrote John Majoros, Director of Taxable Portfolio Management at Wasmer Schroeder in the latest “Asked and Answered” white paper. “To address this, Wasmer Schroeder (WS) Investment teams have spent considerable time and resources building on our core capabilities to focus on areas of the capital markets where additional yield can be attained. Our Multi Sector Income strategy (MITX) is a direct result of those efforts. The strategy combines our deep and varied research expertise with our ability to source high income opportunities across multiple market segments, using our relative value approach when selecting securities.”
For more on the firm’s MITX strategy, click here.
High Yield ETF Options
Investors who are hungry for yield can also opt for exchange-traded funds (ETFs) to satiate their appetites. Here are three ETFs
1. iShares U.S. Fallen Angels USD Bond ETF (NYSEArca: FALN): seeks to track the investment results of the Bloomberg Barclays US High Yield Fallen Angel 3% Capped Index composed of U.S. dollar-denominated, high yield corporate bonds that were previously rated investment grade. The fund generally will invest at least 90% of its assets in the component securities of the index and may invest up to 10% of its assets in certain futures, options and swap contracts, cash and cash equivalents. The index is designed to reflect the performance of U.S. dollar denominated, high yield corporate bonds that were previously rated investment grade.
2. VanEck Vector Fallen Angel High Yield Bond ETF (NYSEArca: ANGL): seeks to replicate as closely as possible the price and yield performance of the ICE BofAML US Fallen Angel High Yield Index (the “Fallen Angel Index”). The fund normally invests at least 80% of its total assets in securities that comprise the fund’s benchmark index. The index is comprised of below investment grade corporate bonds denominated in U.S. dollars that were rated investment grade at the time of issuance.
3. FlexShares High Yield Value-Scored Bond Index Fund (NYSEArca: HYGV): seeks investment results that correspond generally to the price and yield performance of the Northern Trust High Yield Value-Scored US Corporate Bond IndexSM (the underlying index). The fund generally will invest at least 80% of its total assets (exclusive of collateral held from securities lending) in the securities of its underlying index. The underlying index reflects the performance of a broad universe of U.S.-dollar denominated high yield corporate bonds that seeks a higher yield than the overall high yield corporate bond market, as represented by the Northern Trust High Yield US Corporate Bond IndexSM.
For more market trends, visit ETF Trends.