Looking for a steady stream of income? Bond exchange-traded funds (ETFs) present an attractive option. Investors seeking consistent income often prefer bond ETFs to benefit from their diversification and lower volatility in uncertain markets.
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Here, we will look at three bond ETFs offering more than 6% yields: iShares Fallen Angels USD Bond ETF (FALN), Xtrackers USD High Yield Corporate Bond ETF (HYLB), and SPDR Bloomberg Short Term High Yield Bond ETF (SJNK).
TipRanks’ ETF Comparison Tool gives a snapshot of these ETFs across key metrics.
iShares Fallen Angels USD Bond ETF (FALN)
The FALN ETF tracks the Bloomberg US High Yield Fallen Angel 3% Capped Index and provides exposure to high-yield bonds that were previously rated investment grade, often referred to as “fallen angels.” It seeks to generate income while trying to capitalize on the potential price recovery of these bonds as they regain stability and investor confidence.
Notably, the FALN ETF has paid about $1.738 per share in dividends over the past year. It offers a dividend yield of 6.41%.
Xtrackers USD High Yield Corporate Bond ETF (HYLB)
The HYLB ETF tracks the Solactive USD High Yield Corporates Total Market Index and aims to deliver strong returns by tapping into the high-yield sector, which is known for offering potentially higher income compared to traditional investment-grade bonds. Generally, high-yield securities have a below-investment-grade credit rating and are commonly referred to as “junk bonds.”
The HYLB ETF has paid about $2.362 per share in dividends over the past year. It offers a dividend yield of 6.45%.
SPDR Bloomberg Short Term High Yield Bond ETF (SJNK)
The SJNK ETF tracks the Bloomberg US High Yield 350mn Cash Pay 0-5 Yr 2% Capped Index and provides exposure to short-term U.S. dollar-denominated high-yield corporate bonds. They are suitable for investors seeking less interest rate risk than high-yield bonds with longer duration.
With dividends of about $1.763 per share paid over the past year, the SJNK ETF offers a dividend yield of 7.02%.
