In today's market, income investors remain firmly focused on one objective: yield. With traditional sources of income still under pressure, demand for high-income ETFs continues to grow — especially those capable of delivering consistent monthly payouts.
Income-focused investors have had plenty of factors to keep in consideration as of late. The latest CPI report showed that consumer prices rose at an annual rate of 2.6% in December, which was actually 0.1% lower than expectations.
GraniteShares HIPS US High Income ETF receives a renewed "Sell" rating due to persistent underperformance and structural capital erosion. HIPS invests equally in CEFs, BDCs, REITs, and MLPs, all categories suffering long-term capital decay despite high yields. Since the 2023 index change, HIPS underperformance relative to a benchmark got worse.
Investors are increasingly looking beyond traditional stocks and bonds to meet their income goals. One fund drawing attention for its generous yield is the GraniteShares HIPS US High Income ETF (HIPS).
The GraniteShares HIPS US High Income ETF (HIPS) tracks the EQM High Income Pass-Through Securities Index, equally weighting 40 holdings across MLPs, BDCs, CEFs, and REITs. HIPS is a volatile, risk-on fund with a 3-year standard deviation of 14.2% and a Sharpe ratio of 0.42, experiencing significant drawdowns. Due to NAV erosion in components like Annaly (NLY), which lost 50% in price over a decade, HIPS is not ideal for long-term holding.