With equity markets continuing their melt up this year, many retail investors feel a need to chase performance and get into stocks with the new year approaching. Instead of playing the calendar performance game, why not consider a short-term corporate bond portfolio that pays you monthly interest while waiting for your favorite stocks to correct? Last year, I wrote about creating a short-term bond portfolio for your short-term cash needs that could yield anywhere from 2-3%, which it did with success. The anchor of the portfolio was and still is the JPMorgan Ultra-Short Income ETF (NYSEARCA:JPST), which returned over 3.30% this year, and still looks to yield 2-2.25% for 2020. However, we are adding a new product to the mix this year for your short-term cash, the PGIM Ultra Short Bond ETF (NYSEARCA:PULS).
Short-Term Corporate Bond Income
Instead of keeping your money in a commercial bank savings account, consider purchasing ETFs, which yield you roughly 2-2.25% while owning six-month and less corporate bonds. I like the fact of lending money to companies such as: Apple (AAPL) or Biogen (BIIB) for six months. While most of these stocks have hit record highs, why not own their short-term bonds and wait for the equity prices to pullback? The above short-term income bond funds invest primarily in diversified portfolios of short-term, investment-grade fixed and floating rate corporate and structured debt while actively managing credit and duration exposure. These products will pay you monthly interest income right to your brokerage account while you wait for a market pullback.
Steady Monthly Income
Out of any short-term bond portfolio I have ever built, I feel the most confident in this corporate bond portfolio. I personally have owned JPST for my own short-term cash, while looking to add the PULS ETF this year, as well. If you owned JPST last year like
