Displaying items by tag: income

With market swings driven by lofty AI valuations and shifting expectations around future rate cuts, many investors are turning to dividend-paying stocks for steadier income and ballast. 

MPLX offers one of the most attractive income profiles in the large-cap MLP universe, supported by an 8%+ yield and continued EBITDA growth driven by major midstream expansion projects and Gulf Coast assets. 

ConocoPhillips delivers a blend of rising dividends, deep global resource optionality, and strong free cash flow growth powered by cost cuts, LNG expansion, and decades of high-quality drilling inventory.

 IBM rounds out the list with a long history of shareholder returns, consistent free cash flow, and renewed momentum from its transformation into a software- and consulting-led enterprise with emerging tailwinds from AI and quantum computing. 

Finsum: Resilient balance sheets, visible cash-flow pathways, and multi-year catalysts are good ways to select dividend players potential anchors for income-oriented portfolios.

U.S. equities have continued to grind higher, supported by resilient earnings and a steady economic backdrop, prompting increased speculation that markets may be shifting into a more selective, late-cycle environment. Technology names remain a key driver of sentiment, fueled by expectations that AI-related capital spending will shape corporate investment.

In fixed income, lingering inflation pressures and uncertainty around future monetary policy have kept interest-rate expectations volatile, making duration risk harder to navigate. Against this backdrop, investors are showing a growing preference for multi-asset income strategies that can blend dividends, high-yield credit, and alternative income sources to support total return through shifting cycles. 

High-yield credit’s relative resilience has only strengthened the view that diversified, multi-asset income portfolios may be better positioned to withstand volatility as markets adjust to evolving macro conditions.

Finsum: Diversifying when the landscape is uncertain is good for gains as well as risk. 

Derivative income ETFs are gaining momentum with financial advisors as firms broaden their income-generation strategies amid ongoing market volatility and shifting client expectations. Cerulli Associates reports that 15.2% of advisors used derivative income strategies in 2024, with another 7% planning to adopt them, led by strong uptake in wirehouses and increasing interest across independent and regional broker-dealers.

Defined as liquid alternatives that generate income through option-selling, these ETFs drew $26 billion in net inflows in 2023 and $29 billion in 2024, with advisor demand expected to continue rising.

Cerulli notes that inflation-beating returns and expanding issuer participation are driving growth, as the ETF structure reshapes how income-oriented solutions are designed and delivered.

Finsum: Defined outcome ETFs are also expanding, as investor demand for downside protection and predictable outcomes continues to strengthen.

Total return reflects both price appreciation and reinvested dividends, and over time, reinvesting those dividends can dramatically boost wealth. A comparison of two SPY investors from 2023 to 2025 shows that reinvesting dividends produced a 10.12% annualized return versus just 8.14% without reinvestment. 

While that difference seems small, compounding turns $10,000 into $223,691 over decades—versus only $124,424 for the non-reinvestor. Dividend growth accelerates this compounding effect, as rising payouts generate more shares, more dividends, and stronger long-term momentum. 

Dividend growth ETFs specifically target companies with consistent and sustainable dividend increases, setting them apart from high-yield or dividend-quality funds that use different selection criteria. 

Finsum: After screening for dividend growth opportunities, low costs, strong liquidity, and meaningful scale are some of the most important factors

Amid growing advisor interest in fixed income, American Century’s Joe Gotelli highlights municipal bonds as a timely opportunity, especially after recent market dislocations tied to fiscal uncertainty and tariff concerns. 

Despite early 2025 volatility, muni valuations remain appealing compared to taxable bonds, offering tax-free income and potential for excess returns as the Fed nears possible rate cuts. Gotelli notes that long-duration, high-quality muni assets may benefit in a softening growth environment, positioning investors for attractive long-term yields. 

American Century’s active muni ETFs—such as the Diversified Municipal Bond ETF (TAXF) and California Municipal Bond ETF (CATF)—use flexible strategies to manage duration, credit quality, and sector exposure while maintaining tax efficiency. Gotelli emphasizes Active management provides an advantage over passive approaches by allowing deeper credit research and selective exposure to specialized sectors like charter schools and tobacco settlement bonds. 

Finsum: Active ETF Fixed Income, gives investors innovative tools to navigate complex tax and interest rate dynamics.