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Markets have been edgy since the start of August, thanks to renewed U.S.-China trade tensions and China’s yuan devaluation. Trump announced plans to levy a 10% tariff on $300 billion of Chinese imports that aren’t subject to U.S. duties yet. The new tariff will be put into effect on Sep 1. Another $250 billion of Chinese goods are subject to a 25% U.S. tariff. Trump also indicated that the new round of tariffs might rise beyond 25%.
Beijing has so far retaliated with tariffs on $110 billion of American goods, including agricultural products. But as a retaliatory move to the new round of tariffs, China devalued its currency to an 11-year low on Aug 5 and stopped purchases of U.S. farm products. Post China’s action, stocks experienced the worst day of this year on Aug 5.
No wonder, such uncertainty caused a crash in the market. iPath S&P 500 VIX ST Futures ETN (VXX - Free Report) has gained about 24.4% in the past 10 days (as of Aug 9, 2019) while SPDR S&P 500 ETF (SPY - Free Report) , Invesco QQQ Trust (QQQ - Free Report) and SPDR Dow Jones Industrial Average ETF (DIA - Free Report) have lost about 3.4%, 4.5% and 3.2%, respectively.
Investors will definitely want to know about ways that could save them in case of a market bloodbath. In this regard, we highlight a few multi-asset ETFs that could offer investors great returns in the form of capital appreciation and income.
Notably, the multi-asset strategy looks to boost returns and lower overall volatility in portfolios. These products normally provide a high level of current income and take care of downside risks of a specific asset class. These also cater to various asset classes (equity, fixed income, and alternative securities), which have low correlation to each other (read: Play Global Bond ETFs to Join Central Banks' Rate Cut Euphoria).
YieldShares High Income ETF (YYY)
This fund yields about 8.76% annually. It holds 30 closed-end funds ranked the highest by the ISE on the basis of three criteria, namely, fund yield, discount to net asset value and liquidity. Around 75% of the fund is targeted at debt securities while the rest are in equities (read: 6 Defensive ETFs to Beat an Edgy Market in August).
This fund provides almost equal-weight exposure across five global areas — equities, real estate, alternatives, sovereign debt, and corporate debt. This is easily done by tracking the Dow Jones Global Composite Yield Index. The fund offers an annual dividend yield of 8.25%.
iShares Morningstar Multi-Asset Income ETF (IYLD - Free Report)
The fund is broadly diversified and seeks to deliver high current income while maintaining long-term capital appreciation. The product yields about 5.25% annually. The U.S. takes the top spot with 52.50% allocation followed by 4.30% in U.K. and 2.58% in Australia. The fund charges 5.25% annually.
Invesco DWA Tactical Multi-Asset Income ETF
The underlying Dorsey Wright Multi-Asset Income index may invest in both fixed income and equity income ETFs, including those holding investment grade and high yield bonds, fixed-rate preferred shares, dividend paying equities, US Treasuries, MLPs and real estate investment trusts. It rotates between income-oriented segments, depending on market momentum as well as yield criteria. The fund yields 5.71% annually.
Principal Spectrum Preferred Securities Active ETF (PREF - Free Report)
The fund is active and does not track a benchmark. It yields around 5.10% annually. Under normal circumstances, the fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in preferred securities at the time of purchase. It charges 55 bps in fees.
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5 Multi-Asset ETFs to Consider Now
Markets have been edgy since the start of August, thanks to renewed U.S.-China trade tensions and China’s yuan devaluation. Trump announced plans to levy a 10% tariff on $300 billion of Chinese imports that aren’t subject to U.S. duties yet. The new tariff will be put into effect on Sep 1. Another $250 billion of Chinese goods are subject to a 25% U.S. tariff. Trump also indicated that the new round of tariffs might rise beyond 25%.
Beijing has so far retaliated with tariffs on $110 billion of American goods, including agricultural products. But as a retaliatory move to the new round of tariffs, China devalued its currency to an 11-year low on Aug 5 and stopped purchases of U.S. farm products. Post China’s action, stocks experienced the worst day of this year on Aug 5.
No wonder, such uncertainty caused a crash in the market. iPath S&P 500 VIX ST Futures ETN (VXX - Free Report) has gained about 24.4% in the past 10 days (as of Aug 9, 2019) while SPDR S&P 500 ETF (SPY - Free Report) , Invesco QQQ Trust (QQQ - Free Report) and SPDR Dow Jones Industrial Average ETF (DIA - Free Report) have lost about 3.4%, 4.5% and 3.2%, respectively.
Investors will definitely want to know about ways that could save them in case of a market bloodbath. In this regard, we highlight a few multi-asset ETFs that could offer investors great returns in the form of capital appreciation and income.
Notably, the multi-asset strategy looks to boost returns and lower overall volatility in portfolios. These products normally provide a high level of current income and take care of downside risks of a specific asset class. These also cater to various asset classes (equity, fixed income, and alternative securities), which have low correlation to each other (read: Play Global Bond ETFs to Join Central Banks' Rate Cut Euphoria).
YieldShares High Income ETF (YYY)
This fund yields about 8.76% annually. It holds 30 closed-end funds ranked the highest by the ISE on the basis of three criteria, namely, fund yield, discount to net asset value and liquidity. Around 75% of the fund is targeted at debt securities while the rest are in equities (read: 6 Defensive ETFs to Beat an Edgy Market in August).
Arrow Dow Jones Global Yield ETF (GYLD - Free Report)
This fund provides almost equal-weight exposure across five global areas — equities, real estate, alternatives, sovereign debt, and corporate debt. This is easily done by tracking the Dow Jones Global Composite Yield Index. The fund offers an annual dividend yield of 8.25%.
iShares Morningstar Multi-Asset Income ETF (IYLD - Free Report)
The fund is broadly diversified and seeks to deliver high current income while maintaining long-term capital appreciation. The product yields about 5.25% annually. The U.S. takes the top spot with 52.50% allocation followed by 4.30% in U.K. and 2.58% in Australia. The fund charges 5.25% annually.
Invesco DWA Tactical Multi-Asset Income ETF
The underlying Dorsey Wright Multi-Asset Income index may invest in both fixed income and equity income ETFs, including those holding investment grade and high yield bonds, fixed-rate preferred shares, dividend paying equities, US Treasuries, MLPs and real estate investment trusts. It rotates between income-oriented segments, depending on market momentum as well as yield criteria. The fund yields 5.71% annually.
Principal Spectrum Preferred Securities Active ETF (PREF - Free Report)
The fund is active and does not track a benchmark. It yields around 5.10% annually. Under normal circumstances, the fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in preferred securities at the time of purchase. It charges 55 bps in fees.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>