High Yield Spotlight

The markets have shifted over the past month, first because of the 50 basis point cut from the Fed and then because of the China stimulus package. With monetary and fiscal policies easing, there’s a fresh opportunity for risk assets to keep pushing higher, even the ones that look overvalued as it is. One such fund is the InfraCap Equity Income ETF (ICAP). With the markets changing and cyclicals getting new life, this could be a strategy that has some high potential.

Now that the Fed has officially launched its rate cutting cycle, it’s time to give the broader fixed income space another look. If rates are heading lower, that means bond investors could be in line for some share price appreciation potential in addition to that yield. The PIMCO Income Strategy Fund II (PFN) is relatively unconstrained, which could make it the ideal choice for this environment.

As the Fed launches into what’s likely going to be a prolonged rate cutting cycle, covered call funds have been getting some renewed interest. As long as volatility exists, they can keep selling those call options and collecting those premiums. The Voya Global Equity Dividend & Premium Opportunity Fund (IGD) tries to capture those high yields, but takes care to ensure that it’s doing so in a risk-controlled manner.