Getting yield in today’s market environment is a tricky affair, and more investors are having to look elsewhere for yield as inflation and rising rates continue to erode bond income from safe haven Treasuries.
As if inflation isn’t already adding to a wall of worry for investors, growing concerns surrounding China’s latest COVID outbreak continue to grow. In the U.S., bond prices have been following the stock market downward as both assets are feeling the pangs of inflation fears.
“This week, we start with China bringing in additional growth concern,” said Mohamed El-Erian, Allianz chief economic advisor, in an interview with CNBC. “We are now having both growth and inflation concerns and that’s why you’re seeing not just the moves in the equity market, but you’re seeing some peculiar moves in the FX market and in the bond market.”
Meanwhile, the quest for yield doesn’t stop. Investors have to be willing to increase their risk profiles in order to extract more yield in the current market environment.
Getting More From Today’s Income Environment
With a 30-day SEC yield of 8% and a distribution rate of 9.63%, it’s difficult to overlook the Amplify High Income ETF (YYY). YYY consists of a portfolio of 45 closed-end funds (CEFs) based on a rules-based index.
The ISE High Income Index selects CEFs ranked highest overall by ISE in the following factors: yield, discount to Net Asset Value (NAV), and liquidity. This investment approach results in a portfolio which contains a variety of asset classes, investment strategies, and asset managers.
The fund offers:
- Distribution potential: YYY seeks to pay a high level of current income on a monthly basis.
- Appreciation potential: Purchasing shares of closed-end funds (CEFs) below net asset value, also referred to as a discount, may provide potential for appreciation.
- Diversification: YYY holds 45 CEFs diversified by asset class and CEF issuers.
For more news, information, and strategy, visit the Nasdaq Investment Intelligence Channel.
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