Existential Crisis in Bonds Fuels Wall Street’s Income ETF Boom

In an inflation-lashed world where bonds are posting record losses, Wall Street issuers are betting investors hungry for income will instead lavish their millions on ETFs that ride stocks in order to deliver payouts.

At least four issuers have filed plans for so-called income exchange-traded funds in the past few weeks, while three more such products have started trading in the same period. The vehicles target a steady stream of income using a range of equity-based strategies, like buying dividend-paying companies or selling call options on the S&P 500.

The funds are enjoying a surge in popularity as rampant inflation and recession fears whipsaw bonds, boosting the appeal of this alternative source of income. The JPMorgan Equity Premium Income ETF (JEPI), one of the biggest products in the space, is in the top 10 equity ETFs for inflows this year with a $5.4 billion haul that has nearly doubled its assets.