Safe Funds That Yield a Bit More Than Money Markets
Investors who seek a steadier parking place than the PIMCO ETF could consider Guggenheim Enhanced Short Duration Bond ETF (GSY), which yields 0.47% and has a duration of 0.33. Over the past 52 weeks, the share price fluctuated from a low of $49.54 to high of $50.18.
Actively managed, the Guggenheim ETF can hold securities that are rated below-investment grade. The fund currently has 5% of assets in Guggenheim BulletShares 2015 High Yield Corporate Bond (BSJF), an ETF that yields 5.2% and has credit quality that is below-investment grade.
"By investing in the high-yield ETF, we can pick up extra yield in an efficient way," says William Belden, Guggenheim's head of product development.
For a high-quality choice, consider RidgeWorth U.S. Government Securities Ultra-Short Bond (SIGVX), a mutual fund that yields 0.85% and has a duration of 0.81 years. The fund focuses on government mortgage securities. Those yield a bit more than Treasuries.
About 40% of assets are in adjustable-rate mortgages. If interest rates rise, the yields on the securities would also climb, protecting shareholders against losses. During the turmoil of 2008, the average ultrashort fund lost money, but RidgeWorth sailed through the crisis and returned 3.5% for the year. During the past five years, the fund returned 2.7% annually. "We did not lose money during the financial crisis because we are very conservative about the credit risk we take," says portfolio manager Chad Stephens. Charles Schwab recently filed to offer an actively managed short-duration ETF, and more companies are likely to follow. With money-market yields stuck at puny levels, investors will continue seeking safe alternatives. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage. Follow @StanLuxenbergSelect the service that is right for you!
COMPARE ALL SERVICESAction Alerts PLUS
TRY IT FREEJim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
Product Features:
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
TheStreet Quant Ratings
TRY IT FREENew! $49.95/yr
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
Product Features:
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Stocks Under $10
TRY IT FREEDavid Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.
Product Features:
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts
- Weekly roundups
Dividend Stock Advisor
TRY IT FREEJim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
Product Features:
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
TRY IT FREEAll of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
Product Features:
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Options Profits
TRY IT FREEOur options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
Product Features:
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV
