Hitch Your Wagon To Fed Hikes With These 3 Income Ideas

May 05, 2022 11:34 AM ET, , , , , , , , , , , , , , , , 9 Comments

Summary

  • Short-term rates have spiked since the start of the year due to persistent inflation and an increasingly hawkish Fed.
  • Most investor portfolios are likely overweight fixed-coupon longer-duration assets which are vulnerable to further interest rate increases.
  • We highlight three securities that will soon shift from fixed-rate coupons to floating-rate coupons and take advantage of the continued rise in short-term rates.
  • I do much more than just articles at Systematic Income: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »

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This article was first released to Systematic Income subscribers and free trials on Apr. 29

Rising short-term rates have been, arguably, the most important income market dynamic since the start of the year. In this article we highlight

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This article was written by

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ADS Analytics is a team of analysts with experience in research and trading departments at several industry-leading global investment banks. They focus on generating income ideas from a range of security types including: CEFs, ETFs and mutual funds, BDCs as well as individual preferred stocks and baby bonds.

ADS Analytics runs the investing group Systematic Income which features 3 different portfolios for a range of yield targets as well interactive tools for investors, daily updates and a vibrant community.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of AGNCN, VLYPO either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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