Fed Rate Cuts: A Blessing in Disguise for Income Investors
The recent Federal Reserve rate cuts have sent shockwaves through the investment community, with many predicting a decline in dividend yields on ultra-short-term and variable rate investments. But is this really the case?
A Deeper Look at the Data
While it’s true that Fed rate cuts can lead to lower yields, a closer examination of spreads and breakevens reveals a more nuanced picture. For instance, Collateralized Loan Obligations (CLOs) are trading at sufficiently wide spreads compared to comparable fixed-rate bonds, presenting an attractive opportunity for income investors.
Unlocking Safe and Reliable Yields
At the CEF/ETF Income Laboratory, our team of experts specializes in managing closed-end fund (CEF) and exchange-traded fund (ETF) portfolios that target safe and reliable ~8% yields. Our goal is to make income investing easy and accessible for investors of all experience levels.
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About the Author
Juan de la Hoz, a seasoned fixed income trader, financial analyst, and economics professor, brings his expertise to the CEF/ETF Income Laboratory. With a strong focus on dividend, bond, and income funds, Juan provides valuable insights to help investors navigate the complex world of income investing.
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Disclaimer
The views expressed in this article are solely those of the author and do not reflect the opinions of Seeking Alpha or any other organization. Past performance is no guarantee of future results, and investors should always do their own research before making any investment decisions.
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