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1 High-Yield Dividend ETF I Plan to Buy Hand Over Fist in December


Published on 2024-12-01 17:01:03 - Thomas Matters
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  • The fund's income stream is more lucrative than most fixed-income investments. Its yield over the last 12 months is 8%. For comparison, U.S. high-yield bonds (junk bonds) have offered around a 7% income yield on average. Meanwhile, the yield on high-quality Treasury bonds is less than 4%.

The article from The Motley Fool discusses the author's plan to invest in the iShares iBoxx $ High Yield Corporate Bond ETF (NYSEMKT: HYG), which offers a high yield dividend. The ETF focuses on high-yield corporate bonds, which are essentially bonds from companies with lower credit ratings, offering higher interest rates to compensate for the increased risk. The author highlights that despite the risks associated with high-yield bonds, such as potential defaults, the ETF provides diversification across numerous bonds, reducing individual bond risk. The current yield of HYG is noted to be around 5.8%, which is attractive compared to other investment options like CDs or savings accounts. The article also mentions that while high-yield bonds can be volatile, they can serve as a good income source and potentially offer capital appreciation if economic conditions improve. The author plans to buy this ETF "hand over fist" due to its yield and the potential for income generation in a diversified manner.

Read the Full The Motley Fool Article at:
[ https://www.fool.com/investing/2024/12/01/1-high-yield-dividend-etf-i-plan-to-buy-hand-over/ ]