2. Yorkville High Income MLP (YMLP). It only took a few weeks last May for YMLP to fall 6% in value. From some people's perspective, it may be difficult to get excited about an investment where most of the annualized cash flow could be wiped out in a few weeks of rapidly rising rates. Then again, with $250 million in assets under management and a distribution yield of 8.9%, there are plenty of dollars chasing the pipeline possibility.
Perhaps surprisingly, YMLP recently hit a 52-week high. If rates manage to finish 2014 where I expect them to finish -- with the 10-year at 2.75% -- YMLP could see a modicum of capital appreciation to add to "junk-bond-like" cash flow. Keep in mind, I am not recommending that investors hold-n-hope for a particular outcome with this price sensitive investment; rather, I am pointing out that yield chasing has not evaporated in the wake of expert predictions that rates have to go higher.
3. E-Tracs Wells Fargo Business Development Company Index ETN (BDCS). Technically, this exchange-traded note is not a fund. You pay 0.85% for the privilege of getting diversified exposure to the exact performance of the above-mentioned index. Business Development Companies, or "BDCs," are publicly traded corporations that engage in lending at high yield rates to smaller fish. The larger entities often take equity ownership in the smaller venture, offering business acumen in addition to capital. They are similar to private equity firms, though the Securities and Exchange Commission (SEC) requires BDCs to invest 70% of assets in U.S. companies as well as to distribute at least 90% of taxable income in the form of dividends. (That's how BDC shareholders often get juicy 7%-9% yields!)At the moment, BDCS offers about 7% annualized. Of course, investors seem to be benefiting from impressive capital appreciation as well, with the ETN hitting an all-time high. Follow @etfexpert This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.
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