|Bid||22.50 x 36200|
|Ask||22.82 x 38800|
|Day's Range||22.72 - 22.78|
|52 Week Range||21.59 - 23.73|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||-0.28|
|Expense Ratio (net)||0.65%|
Investors worry that mutual funds and exchange-traded funds filled with illiquid bonds and loans issued by highly leveraged corporations could form the next source of financial instability.
For those in or near retirement, the name of the game comes down to one thing -- income. Being able to turn your savings into a steady stream of paychecks after you stop working is really the only thing that matters. Luckily, the boom in exchange-traded funds (ETFs) to buy can provide investors with a great way to do just that.One of the best things about ETFs is that they have democratized a ton of different asset classes and bond varieties. In doing this, investors looking for income can find and build a portfolio for whatever demands they have. Income in retirement can be dynamic, featuring high initial yields, inflation protection, grow over time, etc. And investors can do it with single-ticker access and low-costs.In the end, the best ETFs make building a complete income portfolio a breeze and can help turn savings into a steady paycheck once you punch your last clock. All in all, they are a must-have for those in- or near retirement.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Small-Cap Stocks That Make the Grade But what are the best ETFs for investors to focus on? Here are five funds that can be used to build a complete income portfolio and remove the hassle. Best ETFs to Buy: SPDR Portfolio Aggregate Bond ETF (SPAB)Expense Ratio: 0.04% or $4 per $10,000 invested annually 12-Month Dividend Yield: 3%There's a reason why bonds are called fixed-income investments. Their stability and regular coupon payments make them an ideal base from which an income portfolio can be built. And ETFs make adding this base very simple and cost-effective for retirees.The Bloomberg Barclays U.S. Aggregate Bond Index is the benchmark for the broad bond universe and provides broad exposure to the U.S. investment grade bond universe. This includes everything from Treasury bonds, corporate bonds and mortgage pass-through securities to commercial mortgage-backed securities and asset-backed securities. As the top dog index for bonds, there is a wide variety of income ETFs that track it.But the SPDR Portfolio Aggregate Bond ETF (NYSEARCA:SPAB) may be one of the best.State Street finally got serious a few years ago about competing with the other two big dogs in the ETF world and created its own core line-up of ETFs. This includes the $3.7 billion SPAB. The fund provides exposure to all 4,855 bonds in the index and it does so at a rock-bottom expense ratio of just 0.04%. That low expense ratio allows income seekers to keep more of their bond's distribution payments- currently at 3.17% -- and provides better overall returns. And with free trading available at several discount brokers, using SPAB as core income position only gets better.By using SPAB as their core bond position, investors can gain exactly benefits ETFs were designed to provide. Vanguard Dividend Appreciation Index ETF (VIG)Source: Shutterstock Expense Ratio: 0.08% Dividend Yield: 2%Getting dividends from stocks provides something that bonds can't compete with -- the ability to grow their income potential. As cash flows and earnings increase, stocks tend to hand out more money back to shareholders. Historically, stocks have on average grown their dividends by about 5.1% per year. For retirees, this growth is critical in making sure their purchasing power keeps up with inflation.Tapping into this is the Vanguard Dividend Appreciation Index ETF (NYSEARCA:VIG).VIG's M.O. isn't about an initial high-yield -- it currently only pays 2% -- but growing that payout over time. The ETF looks at stocks that have a history of increasing dividends for at least 10 consecutive years. These "dividend achievers" are exactly what investors are looking or in order to make sure their income keeps up with inflation.The ETF tracks currently 180 top stocks, including Microsoft (NASDAQ:MSFT) and Nike (NYSE:NKE). VIG, however, does not include real estate investment trusts (REITs) or MLPs. As a result, the vast bulk of its distributions are considered "qualified dividends" for tax purposes. And as a Vanguard ETF, VIG's expenses are dirt cheap. The nearly $33 billion ETF only charges a measly 0.08% in expenses. * 15 Stocks That May Be Hurt by This Year's Big IPOs When it comes to income ETFs, VIG can play a powerful role in getting some serious and growing equity income. iShares Cohen & Steers REIT ETF (ICF)Expense Ratio: 0.34% Dividend Yield: 2.9%Speaking of those real estate investment trusts (REITs) that previously mentioned VIG avoids, they have long been a great way to boost the income generated from a portfolio. That's because REITs feature a special tax structure that allows them to push out much of their cash flows to investors. Those cash flows are driven by the rents and profits from the underlying properties they own. So as apartments, office buildings, and strip malls keep churning out rent growth, REITs' dividends rise.The same could be said for REIT ETFs like the top-notch iShares Cohen & Steers REIT ETF (NYSEArca:ICF).What makes ICF a particularly great ETF for retirees/income seekers is that ICF focus on the so-called "realty majors." Top holdings such as Public Storage (NYSE:PSA) or Equitable Residential (NYSE:EQR) are some of the leading firms specializing in their respective property types. With ICF, investors get exposure to the largest 30 REITs in the country.For income seekers, that's a place to be. For one thing, these firms' large asset bases provide plenty of cash flow and dividend stability. What it really means is a steady dividend in good times and bad. Moreover, REITs like ICF's holdings have long been able to raise their payouts at rates faster than inflation. This can provide a boost to income over time as well.With ICF added to your income ETFs, investors can add some serious current income and future dividend growth. Invesco Senior Loan ETF (BKLN)Source: Shutterstock Expense Ratio: 0.65% Distribution Yield: 4.5%Junk or high-yield bonds are a great way to score more income by moving down the credit ladder. The only problem is that junk bonds are very susceptible to interest rate hikes. And with the Federal Reserve starting to raise rates, income seekers looking to boost their incomes are facing a quandary.But here again, income ETFs can come to the rescue for a complete income portfolio.Senior bank loans are pools of corporate-issued debt that adjust rates every 30 to 90 days. The benefit of this is that as the Fed raises rates, those increases will be reflected in bank loan's coupons. The kicker is that senior loans are often issued to companies with credit ratings below investment grade. This means they offer higher starting yields than Treasury bonds. Investors get their cake and get to eat it as well.ETFs like the Invesco Senior Loan ETF (NYSEARCA:BKLN) make adding the once-hard-to-obtain asset class easy. BKLN is the largest of the ETFs in the sector and tracks the S&P/LSTA U.S. Leveraged Loan 100 Index. This index is designed to match the performance of the largest institutional leveraged loans based on market weighting, spreads, and interest payments. All in all, BKLN holds more than 118 different loans with top holdings including debt from PetSmart and Burger King. * 15 Stocks Sitting on Huge Piles of Cash With a yield of 4.5%, BKLN can add the extra oomph that income seekers need to build out their income portfolios and shows how the best ETFs can make adding exotic assets classes easy. iShares National Muni Bond ETF (MUB)Expense Ratio: 0.07% Distribution Yield: 2.5%One of the biggest headaches in managing an income portfolio is taxes. We all know the saying about death and taxes. Uncle Sam has to have his share. Lowering how much you hand over to him is very important- especially so in retirement. So, if you can pay him nothing, even better for you. That's why municipal bonds and muni ETFs are powerful tax fighting tools. Issued by local and state governments, municipal bonds are free from federal taxes and in many cases, state taxes.When it comes to ETFs, the $11.8 billion iShares National Muni Bond ETF (NYSEARCA:MUB) is the king of the muni castle.MUB's holds a whopping 3,703 tax-free muni bonds. That's an amazing amount of diversification for just only 0.07% in expenses. It also provides plenty of tax-free income firepower. The ETF currently yields 2.5%. That's not too shabby already and is about the same as previously mentioned SPAB. But that yield gets even more impressive when you factor in taxes. For someone in the highest bracket, they would have to earn more than 5.20% to get the same amount of income.And that is where munis shine. By using MUB in a taxable account, income seekers can build a tax-free base of income to supplement or support the other income ETFs on this list. For retirees, municipal bonds are a must-have investment when building their income streams.At the Time of writing, Aaron Levitt did not have a position in any of the ETFs or stocks mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 5 of the Best Stocks to Buy Under $10 * 7 Single-Digit P/E Stocks With Massive Upside * 7 Best Quantum Computing Stocks Trading Today Compare Brokers The post The 5 Best ETFs to Buy for a Complete Income Portfolio appeared first on InvestorPlace.
As stocks continue to build forward momentum after a tumultuous December, it's been high-yield bonds going the opposite direction with the ICE BofAML US High Yield Master II Total Return Index resuming its downward trajectory. Investors looking to capitalize on the weakness in high yield can look to the ProShares Short High Yield (SJB) . With respect to their 200-day moving averages, SJB is tracking above this level while high-yield bond ETFs like the SPDR Bloomberg Barclays High Yield Bond ETF (JNK), iShares iBoxx $ High Yield Corp Bd ETF (HYG) and the Invesco Senior Loan ETF (BKLN) are languishing in the current risk-off environment.
Amid fears of rising Treasury yields, some investors pulled money from fixed income funds for the week ended Nov. 1, but some exchange traded funds focusing on bonds managed to see healthy inflows. “Investors ...
Leveraged loans, also known as senior loans, are embraced by bond investors as interest rates rise due in large part to the floating component sported by these bonds, which helps mitigate sensitivity to higher interest rates. BKLN tracks the S&P/LSTA U.S. Leveraged Loan 100 Index and is the largest ETF dedicated to leveraged loans. Year-to-date, BKLN has traded modestly lower, incurring losses that are significantly lower than those of more traditional, longer-dated bond ETFs.
The constant strain of the Sino-U.S. trade relationship brought Chinese stocks to their knees in 2018 – the latest wave of selling sending mainland Shanghai Composite Index to levels not seen since November 2014. Volatility-tied products are under pressure again as wild price swings have returned to the markets. U.S. homebuilders are going through rough times with disappointing numbers in building permits and housing starts. Rising funding costs are a major problem for indebted corporations, especially as U.S. companies’ debt load reached record levels of $6.3 trillion. Closing the list, FAANGs have a wall of worries to climb with Netflix hoping to lead the way up with surging revenue and subscriber adds. Check out our previous Trends edition at Major Stock Indices Feel The Pain of Multi-Year High Rates.
High yields and floating rates are among the factors drawing investors to senior loans and related exchange traded funds, such as the PowerShares Senior Loan Portfolio (NYSEArca: BKLN). Strong domestic ...
Federal Reserve Chairman Jerome Powell confirmed the overall market consensus on Wednesday that interest rates would rise with the announcement that the federal funds rate would elevate by 25 basis points to 2.25. In the bond markets, activity for high-yield, senior loan and floating rate-focused ETFs ticked higher as investors scrambled to position their portfolios to take advantage of the higher interest rates. "In fixed income, high-yield (which has been quiet of late) saw some increased activity and was mostly better for sale," noted Brian Gilman of ETF Sales & Trading at Virtu Financial.
As the stock market continues to make record highs, the infusion of robotics and artificial intelligence in the bond market is giving the fixed-income space its own renaissance as more emerging technologies are changing the landscape of the industry. A recent Forbes article highlighted the bout of changes happening in the fixed-income arena, such as more reliance on machine learning, automation and algorithms. Adopting this technology can allow for better liquidity and enhanced speed when it comes to identifying trends within the bond market.