These 3 Monthly Income ETFs Pay Between 4% and 6% From Actual Bond Coupons, Not Options Tricks
There is a growing category of high-yield ETFs that generate income by selling options on equity indexes, and for the right investor, they serve a purpose.
JMBS: Strong High-Quality MBS ETF, 5.5% Dividend Yield
Janus Henderson Mortgage-Backed Securities ETF focuses on high-quality MBS assets of moderate duration. The fund's high-quality portfolio sees below-average drawdowns and volatility, while its 5.5% dividend yield ensures a reasonably good amount of income for investors. Returns have been reasonably good since inception, with the fund outperforming its benchmark.
JMBS: Another Solid Risk-Return Option From Janus Henderson
The Janus Henderson Mortgage-Backed Securities ETF offers exposure to mortgage-linked securities with a focus on agency MBS. Its yield exceeds the iShares iBoxx $ High Yield Corporate Bond ETF, and its standard deviation is lower. Mortgage rates being pent up above 6% since 2022 has provided MBS vehicles an opportunity to secure high yields on new and aged issues.
JMBS: Mortgages Are Appealing Here
JMBS ETF offers exposure to agency mortgage-backed securities, providing income and portfolio insulation during risk-off environments with low correlation to corporate credit and equities. GSE MBS are backed by Fannie Mae, Freddie Mac, and Ginnie Mae, carrying high ratings due to implicit U.S. government guarantees. JMBS has a 7.1-year duration, closely correlated with the iShares 7-10 Year Treasury Bond ETF, making it an intermediate duration instrument.
