In the news this week, a panel of income experts discusses the best ETFs for boosting income. Emerging market bonds and P2P lending offer opportunities as interest rates rise and the energy sector is adapting with income investors in mind.
The Emerging Markets Boom is Taking Place in Bonds, Too (CNBC, May 15)
As interest rates rise, “a raft of bond funds – both active and passive – are turning to bonds from emerging markets, where rates are still being held at low levels to sustain the total returns investors want.” Emerging markets have received a lot of attention, but mostly when it comes to stocks. “Bonds’ big issue has been that hard economic data this year has been weaker than sentiment indicators, whose post-election surge convinced markets that faster growth was near at hand.”
Are Dividend Yields Better Than Peer-To-Peer Yields for Income Investors (Dividend.com, May 18)
Peer-to-peer (P2P) lending offers a unique investment option with small minimum amounts spread among different borrowers. The average historical returns for these types of investments range from 5-7%. They have gained popularity in recent years since they are “relatively easy for lenders to get involved with, and because the returns on P2P lending have had minimal correlation to the broader stock market.” These investments are usually short term, do not receive the same tax benefits and reinvestment options as dividends, with a relatively new investment structure.
