Fixed income investors are well aware that the safety of governments bonds won’t provide supercharged yields. This is where sources like real estate or other alternatives can help outpace inflation.
“Given high recent inflation, it is important to note that income from real assets is often protected against inflation,” a Barron’s article says. “For example, the long-term contractual payments typical of infrastructure investments usually have built-in inflation escalators that help protect yields against the impact of rising costs.”
Now, the question is where investors can obtain this level of income. Certain exchange traded funds (ETFs) that hold companies with strong yield potential are an option, especially since they make exposure to these equities easier than holding multiple positions.
An Alternative Income Option
With a 30-day SEC yield of almost 7%, the Global X SuperDividend Alternatives ETF (ALTY) is certainly worth a look. As opposed to safe haven debt like Treasury yields, ALTY gives fixed income investors exposure to a variety of sources, such as real estate and business development companies (BDCs).
ALTY seeks to track the price and yield performance of the Indxx SuperDividend® Alternatives Index. The underlying index is comprised of securities that rank among the highest dividend-yielding securities in each eligible category of alternative income investments, at the time of index reconstitution, as defined by the index provider.
ALTY offers:
- High income potential: ALTY invests in among the highest-yielding securities across a variety of alternative asset classes, potentially increasing a portfolio’s yield.
- Monthly distributions: ALTY makes distributions on a monthly basis, providing a regular source of income for a portfolio.
- An alternative solution: ALTY invests in four different alternative income segments, including real estate, MLPs and infrastructure, private equity and BDCs, and fixed income and derivative strategies, potentially serving as a portfolio’s entire alternatives allocation.
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