Two Ways to Find Income Despite the Bond Rally

The Fed has declared war on consumers in its effort to hold down interest rates to service the $18 trillion in U.S. debt at rates that don’t unhinge the budget. To that end, I don’t see a major threat of upside rate adjustments for at least a year — especially since U.S. bonds are still paying out more than debt from Japan, Germany, France, Spain and Italy. So what is a yield-seeking investor to do? Well, I’ve found certain high-yield sectors to be a great alternative to fixed income. Here are just two of my favorites that I expect to thrive in this persistently low-yield environment.

Energy MLPs - When you can invest in the domestic energy boom and earn yields of 10% or more for your trouble, all the better — and that’s has made energy master limited partnerships (MLPs) more and more popular. Covered Call ETFs - Looking at the universe of equity funds that own strong blue-chip names, what I’m interested in are managed closed-end funds that sell calls and thereby bring in option premium as income — so that investors in these funds can make 9%-10% in dividends, no matter what happens in the bond market or anywhere else.

Source: InvestorPlace

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