There is little doubt that the past few months have delivered a lot of ups and downs in investor sentiment. As the capital markets struggle to digest the global uncertainty of the next Fed meeting, tensions with Iran over oil, and a protracted trade war with China, investors are on a teeter-totter of emotions. Fortunately, there are still some ETFs out there that offer alternatives to the traditional equity choices that fill ETF portfolios.
The VanEck Vectors Fallen Angel High Yield Bond ETF (ANGL) is one option, as it seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the ICE BofAML US Fallen Angel High Yield Index (H0FA), which is comprised of below investment grade corporate bonds denominated in U.S. dollars, issued in the U.S. domestic market and that were rated investment grade at the time of issuance.
Appearing on ‘The Claman Countdown’ on Fox Business Network on Monday, ETF Trends CEO Tom Lydon said ANGL was a solid ETF for investors looking for better yields using often overlooked bonds.
“Just cause there’s uncertainty doesn’t mean there aren’t great ETFs out there,” Lydon told host Liz Claman. “One is ANGL, the Fallen Angel ETF. Again with lower interest rates, going out on the yield curve a bit more with greater duration, and even ETFs or bonds within those ETFs that have gone from corporate down to high-yield with that downgrade, gives a better and better yield over time.”
“With the idea that when they dip below from corporate to high yield, all of a sudden all the big corporations, all the endowments have to sell them, and they go on sale. And what happens is this index picks them up. They’re not going away anytime soon. Here you are getting these yields in this ETF yields over 5%,” he added.
Another ETF play for investors is the ProShares S&P 500® Dividend Aristocrats ETF (NOBL), which seeks investment results, before fees and expenses, that track the performance of the S&P 500 Dividend Aristocrats Index. NOBL is the only ETF that focuses exclusively on companies in the S&P 500 that have grown dividends for at least 25 consecutive years.
Notably, NOBL’s index, the S&P 500 Dividend Aristocrats, has outperformed the S&P 500 with lower volatility since its inception. NOBL is part of the largest suite of ETFs focused on dividend growers, covering U.S. and international markets, as Lydon explained.
“If you’re looking for dividend-oriented stocks as opposed to just buying the S&P 500, ten years of a bull market is gonna end one of these days, why not go into those top 500 and look for those that have increased their dividend consistently over a 25 year period of time. And if you pull those out, you’ve done quite well: actually five times better over that period of time compared to the S&P 500,” Lydon stated.
For more market trends, visit ETF Trends.