Benchmark Treasury yields are rising across the board as inflation fears continue to swirl in the capital markets. Even so, the benchmark 10-year yield may not be enough for what fixed income investors are looking for these days.
“The yield on the 10-year Treasury note is quickly approaching 3%, a level not seen since late 2018. Investors know that rapidly rising rates spell trouble for stocks and the economy,” Barron’s notes. “But there may be less reason to worry than investors think.”
“The 10-year yield is considered the benchmark for mortgage lending and the discount rate used to calculate the present value of future cash flows,” Barron’s adds. “What is striking now is the speed with which it has risen.”
Getting More From Income
Investors looking to more yield may want to try abroad. More specifically, the Global X SuperDividend Alternatives ETF (ALTY) is certainly worth a look, especially with its 30-day SEC yield of 6.79% as of April 22.
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, which 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.
- 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: 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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