The vast majority of traditional long-only ETFs focus on just
one specific asset class, be it bonds, commodities or stocks.
However, multi-asset and
asset allocation products are increasing in
number and popularity with investors who want a little bit of
everything, or least more than one asset class, in their ETFs
The high-yielding Guggenheim Multi-Asset Income ETF (NYSE:
) was one of the earlier entrants to the multi-asset ETF
category. Nearly six years old, CVY is now home to almost $642
million in assets under management. Proving there's room for more
multi-asset funds, the Global X SuperDividend ETF (NYSE:
) has accumulated more than $66 million in AUM in less than a
year of trading.
CVY and SDIV are two of the known entities in the multi-asset
ETF race, but the iShares Morningstar Multi-Asset Income Index
) is worthy of consideration as well. Just six weeks past its
debut date, the iShares Morningstar Multi-Asset Income Index Fund
is already home to $21.3 million in AUM, indicating investors are
embracing this bond-heavy fund.
On that note, it should be said that IYLD is an ETF fund of
funds, meaning all of its holdings are other iShares ETFs.
Currently, IYLD is more than 51% to domestic fixed income funds.
The iShares iBoxx $ High Yield Corporate Bond ETF (NYSE:
), the largest U.S. junk bond ETF, and accounts for over 19% of
IYLD's weight while the iShares Barclays 20+ Year Treasury Bond
) receives an allocation of 16.6%.
IYLD's other bond holdings include the iShares iBoxx $ Invest
Grade Corporate Bond ETF (NYSE:
) and the iShares JPMorgan USD Emerging Markets Bond ETF (NYSE:
). In other words, IYLD's bond components have some spice to them
and don' revolve boring, low-yielding U.S. Treasuries.
Roughly 29% of IYLD's weight is divided between the iShares
Dow Jones Select Dividend Index Fund (NYSE:
) and the iShares S&P U.S. Preferred Stock Index Fund (NYSE:
). The iShares FTSE NAREIT Mortgage Plus Capped Index Fund (NYSE:
) garners a weight of about 5%.
Since IYLD is still a new ETF, yield information isn't yet
available for the fund, but it's reasonable to assume the yield
will at least be decent. HYG, PFF and REM can all easily be
considered "high yielders" while DVY, EMB and LQD at the very
least fall into the "decent yield" category.
Income investors may also want to consider IYLD because it
appears the fund will be paying a monthly dividend. Just six
weeks old, the new fund has already made one payout.
On the downside, the ETF-of-ETFs concept isn't for everyone
and while combining multiple high-yield plays under one umbrella
is efficient when it comes to capital outlays, IYLD's yield could
prove to be tempered relative to owning some of its constituents
By no means does that imply this is a bad ETF, it's not. It's
a new fund and as is the case with every new ETF, investors have
time on their side and can let IYLD mature a bit before jumping
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