Low interest rates are depressing yields on a variety of asset classes and crimping income streams in the process. Investors can combat the lethargic environment with actively managed exchange traded funds such as the Principal Active Income ETF (YLD).
YLD is an actively managed fund that seeks to achieve its investment objective by investing its assets in investment grade and non-investment grade fixed income securities and in equity securities. The fund’s Sub-Advisors actively and tactically allocate the fund’s assets among fixed income securities and equity securities in an effort to take advantage of changing economic conditions that the Advisor believes favors one asset class over another.
ETF investors using funds in safe haven Treasurys have to be wondering where else they can get higher yields. Funds like YLD can supersize returns.
YLD assets are allocated across various income-producing asset classes to optimize portfolio stability, efficient growth, and income with a defensive quality bias. The ETF’s corporate bond exposure could prove particularly useful in the current market climate.
Is the YLD ETF Your Fixed Income Solution for the Road Ahead?
Low yields and coronavirus fears constitute a formidable roadblock when it comes to fixed income investing, but there are still some income-generating opportunities available.
A multi-asset approach can bolster equity and fixed income-laden portfolios.
YLD’s status as an actively managed fund is advantageous for investors looking to avoid some of the pitfalls associated with passively managed multi-asset ETFs, including over-exposure to high-yield assets that may be strained by those lofty payouts.
Multi-asset funds can feature exposure to common stocks, master limited partnerships (MLPs), real estate investment trusts (REITs), closed-end funds, and preferred stocks
Multi-asset exchange traded funds have provided diversified exposure to a group of various asset classes and generated attractive yields and have become income investor favorites as advisors and investors searched for new yield sources amid several years of rock-bottom U.S. interest rates.
YLD seeks to generate consistent income through changing market environments and over market cycles. It invests opportunistically across a diversified range of income-generating asset classes while managing for risk. A proven investment process, long history of income investing, and strong risk management and credit research capabilities may help enhance returns while reducing risks.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.