|Source: Capital Pixel|
If we go back to the good ol' day,s we could just put 40% in AGG, the exchange traded fund (ETF) that tracks the Barclay's Aggregate Index and be done with it. Back then, AGG offered a decent yield for its duration. Unless you are an ostrich, you know this is no longer true. Today, the Aggregate Index is loaded with low-yielding Treasury issues (gee, I wonder how that happened!) and its yield is 1.56% with a duration of 4.36 years - not a real attractive yield/risk tradeoff.
So where can the DIY investor go to find some ideas that might improve this tradeoff? This, of course, assumes that you are either willing to do some research or obtain a whittled down list of ideas to talk about with your advisor.
The first place you might want to consider is Seeking Alpha. Click "Dividends & Income" at the top, and on the right hand side of the page you come to you'll find:
|Source: Seeking Alpha|
In fact, at this juncture, the returns are an indication of which funds will suffer the most when yields rise!
A second place to get ideas is from the list of ETFs people viewed when checking on a particular ETF. For example, if you put "JNK" in the quote box at Yahoo! Finance, you get:
Disclosure: This post is for educational purposes only. I own some of the funds mentioned. Individuals should do their own research or consult with a professional before making investment decisions.
As you rightly point out, chasing higher yields is fraught with risks. Spanish bonds is yet another example!ReplyDelete
Good to see you back!ReplyDelete
Thanks Robert! Been a long break, but I'm glad to be back!Delete
This is interesting. I do find this idea very fresh and useful too.ReplyDelete