This ETF offers multi-asset class exposure to high yielding securities, delivering a diversified, balanced portfolio that is capable of paying a meaningful distribution yield. As such, IYLD can be used in a number of ways within a portfolio. Those focusing on the long-term may see an allocation to IYLD as a tool for enhancing current returns while also achieving exposure to asset classes that are often overlooked or underweighted in long-term portfolios. More active investors may see IYLD as a handy tactical tool for pulling back slightly on risk exposure in anticipation of declines in risky assets.
IYLD is an ETF-of-ETFs, which means that the underlying securities are other exchange-traded products. While there are a number of ETFs on the market that target these asset classes and seek to deliver high yields, IYLD is unique in that it includes exposure to stocks, bonds, and alternatives within a single ticker. So while it may appear that there are only 10 or so component holdings, IYLD actually offers access to thousands of individual securities.
One item worth noting is the expense ratio; the ETF-of-ETF structure results in multiple layers of fees, which can lead to some additional expenses for investors. Those looking to skimp on management fees could construct the IYLD portfolio on their own--though that would involve potentially significant commissions.