High Yield Spotlight

Interest rates have been falling all along the yield curve now that the Fed has begun its latest cutting cycle. That means yields on a lot of fixed income products are falling as well, but not so for the Invesco Municipal Opportunity Trust (VMO). It might still be on sale despite the new higher yield, which makes it a great time to review this fund and how it looks moving forward.

The junk bond market has been a consistent outperformer throughout the past couple years. That trend could be ending as credit spreads remain stuck and inflation becomes a larger concern for many investors. Is re-inflation the next negative catalyst coming soon? The Pioneer High Income Fund (PHT) has been around for more than 20 years and has seen it all over that time.

Even though Treasuries have gotten bounced around quite a bit over the past few years, they remain one of the best long-term risk-off assets. Save for a couple of brief periods, there hasn’t been high demand for safe haven trades. Covered call strategies, however, have been in demand. The iShares 20+ Year Treasury Bond BuyWrite Strategy ETF (TLTW) has been able to deliver huge yields up to this point, but total returns have been mixed.