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7 ETFs Yielding 7% Or More

by on August 27, 2012 | Updated September 24, 2012

For the past several years, interest rates in the U.S. and in many developed countries around the world have been hovering at record lows as central banks have attempted to spur economic growth by reducing borrowing costs. And all indications are that the low interest rate environment is here to stay–at least for another few years. Analysts generally agree that most interest rates won’t begin to climb until 2014 at the earliest, and it’s entirely possible that investors are looking at another several years of record low rates.

While this environment may be good for those looking to borrow, it poses a significant challenge to those looking to generate meaningful current returns on their portfolio. Against this backdrop, many traditional sources of current returns have dried up. Treasuries yield next-to-nothing; 10-year notes are sporting a yield in the neighborhood of 1.7%, while 5-year notes offer up a paltry 0.70%. Even long-dated 30-year government bonds, which come with significant interest rate risk, are yielding well less than 3%. Some TIPS issues have even gone off with negative yields, highlighting the struggles investors can face [see 101 ETF Lessons Every Advisor Should Learn].  [click to continue…]

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Of the nearly two dozen products in the High Yield Bonds ETFdb Category, it is two broad-based funds that account for the bulk of assets; HYG and JNK are by far the most popular choices in this asset class. But they are hardly the only ETF options for exposure to junk bonds; there are options for achieving very granular exposure in terms of regional exposure with products such as EMHY (emerging markets) and HYXU (global ex-U.S.). Similarly, those looking to fine tune duration have the suite of BulletShares products from Guggenheim (BSJC through BSJH) as well as funds such as SJNK

Now, thanks to both recent and more dated innovations, there are options for focusing in on a specific stretch of the credit risk spectrum as well. When it comes to junk bond ETFs, there are now several shades of credit risk, from the relatively high quality to the downright speculative. In other words, there are now ETFs for tapping into various corners of the junk bond market, from borderline-default to borderline-investment grade. 

Below, we profile a handful of junk bond ETFs that might be appealing to those looking to micro-manage their risk and return profiles [for more ETF insights, sign up for the free ETFdb newsletter]: [click to continue…]

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After capping off one of the strongest first quarters in 14 years, major benchmarks have stalled their rally, as conflicting data from all around the world has put markets in a rut. As we head into the summer months, investors will hope overarching issues, like European debt, will cool off but all indications point to […]

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iShares continues to expand its suite of fixed income ETFs in 2012, rolling out a pair of ETFs that bring a new level of granularity to corporate bonds. The Baa-Ba Rated Corporate Bond Fund (QLTB) and B-Ca Rated Corporate Bond Fund (QLTC) will seek to replicate indexes comprised of bonds with specific credit ratings, segmenting […]

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