3 High-Yielding Fund Picks for Contrarian Investors
These counterpunching funds deliver the income, but it's apt to come with a big dose of volatility.
Confounding many market experts, Treasury yields have remained stubbornly low even as stocks have rallied back following the Brexit vote. Investors seem to be betting that even if the Federal Reserve takes action to raise rates later this year, it won't act aggressively to do so. That means that yield-starved investors are going to need to venture beyond the realm of high-quality bonds if their goal is to wring out a positive real yield.
Because yield is so scarce these days, it also means that every rock has been turned over in search of it. That helps explain the recent rallies in junk bonds, emerging-markets credits, and senior loans; investors are looking for returns wherever they can find them. As a money manager friend recently put it, anything with upside in the current market "has a little hair on it." (I know. Ew.)
Christine Benz does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.