Continued market volatility has sent investors toward the safe haven of U.S. debt. But that appeal comes at a cost – higher prices for that debt and lower yields. If you’re looking for yield now, you may have to look beyond Treasury exchange traded funds.
U.S. Treasury bond yields are still paltry. The 10-year bond gives 3.3%, while the three-month is close to nothing at 0.13%. If the markets sees more volatility in the coming weeks, those yields may become even less appealing.
Stocker Blog writing for Favstocks notes that there are at least 15 ETFs yielding 3% or greater, and you’re not restricted to simply putting bonds in your portfolio to generate income. In addition to bonds, yields can come from dividend-weighted funds, utilities, real estate, currencies and more.
A few funds kicking off handsome yields include:
- PowerShares High-Yield Corporate Bond (PHB), yielding 8.5%
- First Trust FTSE EPRA/NAREIT Global Real Estate (FFR), yields 3%
- PowerShares CEF Income Composite Portfolio (PCEF), 8.7%
- WisdomTree Equity Income Fund (DHS), yields 4.8%
- Utilities Select Sector SPDR (XLU), yields 4.4%
This is just a sampling. There are a multitude of ETFs offering respectable yields. Chasing down yields isn’t everything, though. It is best to have a strategy in place to keep yourself in check. We use the 200-day moving average to determine when we’re in and when we’re out. When a position is above its 200-day, it’s a buy signal. When it drops below or 8% off the recent high, it’s a sell signal.