Here are 5 ETFs that offer a yield of over 10% right now
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It’s a good time to be a yield-hungry investor. The Federal Reserve’s aggressive interest rate hikes over the past year have pushed a number of U.S. Treasury bond yields over 4%. As a result, equities and corporate credit funds have raised their returns in an effort to attract investors. CNBC Pro screened for ETFs that invest in stocks and bonds, and yield more than 10% in dividends. JPMorgan Equity Premium Income ETF (Ticker: JEPI) The ETFs that showed up on the screen included JPMorgan’s actively managed equity and equity derivative ETF , known by its ticker JEPI. The fund offers an impressive yield surpassing even some junk bond products. Its 30-day SEC yield is more than 11.15%. The 30-day SEC yield shows the dividends and interest earned after expenses. The ETF holds defensive and dividend-yielding stocks while selling call options on the S & P 500 on a monthly basis. JEPI has seen over $14 billion in net inflows over the past year as investors look for ways to offset inflation. It’s the largest of the five ETFs that showed up on CNBC Pro’s screen, with more than $20 billion in assets. WisdomTree Alternative Income Fund (Ticker: HYIN) WisdomTree has made alternative investments like private equity, private credit and hedge funds more accessible to investors through its Alternative Income Fund ETF . These historically exclusive assets used to be limited to institutional investors and ultra-high-net-worth individuals due to eligibility requirements, high investment minimums, fees, and liquidity issues. The ETF tracks the Gapstow Liquid Alternative Credit Index and has a 30-day SEC yield of 11.33%. The ETF share price has also appreciated by nearly 10% this year. VanEck Mortgage REIT Income ETF (Ticker: MORT) The rise in risk-free rates led to the dramatic re-rating of real estate investment trusts in 2022. This means that REITs today offer new investors significantly higher yields than they did this time last year. VanEck’s MORT fund is one such ETF offering a 30-day SEC yield of 11.91%. The index tracker fund holds the largest and most liquid companies in the U.S. mortgage REIT sector that derive at least 50% of their revenues from mortgages. BondBloxx CCC Rated USD High Yield Corporate Bond ETF (Ticker: XCCC) Investors willing to accept higher risk might find BlondBloxx’s XCCC attractive. The ETF tracks the ICE BofA CCC and Lower U.S. High Yield Constrained Index and currently offers a 30-day SEC yield of 13.26%. The fund invests in bonds rated CCC1 and lower on average by three major rating agencies. The below-junk credit rating means bond issuers pay high interest to borrow but are often at risk of default. The fund attempts to minimize risk by capping exposure to any single issuer at 2% of the fund. JPMorgan Nasdaq Equity Premium Income ETF (Ticker: JEPQ) The JPMorgan Nasdaq Equity Premium Income ETF appears to be a riskier alternative to the defensive-leaning JEPI. JPMorgan says the JEPQ fund generates income by selling options as well as investing in U.S. large-cap growth stocks in the Nasdaq 100 Index. The actively managed fund has delivered returns linked to the index but with less volatility in 2022. The fund currently offers an SEC yield of 15.67%. Hamilton Reiner, portfolio manager at JPMorgan for 14 years, manages both the JEPQ and JEPI.
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