Looking for Income in Market Volatility? High-Yield Bonds Might Be Your Answer
In the midst of market volatility, investors are constantly searching for ways to maintain their income and portfolios. One attractive option, according to BlackRock’s Rick Rieder, is high-yield bonds. These bonds have been gaining traction as a reliable source of income, especially with recent fluctuations in the market.
Rick Rieder, the global chief investment officer at BlackRock, believes that high-yield credit is currently in the best fundamental shape he has ever seen in his entire career. These bonds, often referred to as junk bonds, have seen a transformation in recent years and are now considered to be in good credit quality. In fact, many high-yield bonds are moving up to investment grade, showcasing their improved standing in the market.
For investors looking to capitalize on high-yield bonds, BlackRock offers two options: the BlackRock Flexible Income ETF and the recently launched BlackRock High Yield ETF. The BlackRock Flexible Income ETF is actively managed and has a 30-day SEC yield of 5.91% with a 0.40% net expense ratio. On the other hand, the BlackRock High Yield ETF has a 30-day SEC yield of 6.85% and an expense ratio of 0.45%. Both of these funds provide investors with exposure to high-yield credit, offering a potentially attractive income stream.
In light of recent market events and concerns over a potential recession, Rick Rieder also shared his thoughts on the Federal Reserve’s rate cuts. He believes that the Fed should move the fed funds rate to 4% to 4.5% sooner rather than later, but does not see a need for panic rate cuts. With the economy showing signs of slowing but still in good shape, Rieder emphasizes the importance of the Fed adjusting rates appropriately to avoid any unnecessary disruptions.
At Extreme Investor Network, we believe that staying informed and making strategic investment decisions is crucial in navigating the volatile market environment. High-yield bonds may offer investors a unique opportunity to generate income while also diversifying their portfolios. Be sure to explore the latest opportunities in high-yield credit and consider adding these bonds to your investment strategy for potential long-term growth.