Displaying items by tag: returns

REITs have faced a tough stretch over the past five years, weathering both the COVID-19 pandemic and a sharp rise in interest rates. Despite these challenges, their core purpose remains unchanged: to deliver steady income through rental-generating assets that distribute at least 90% of profits. 

For income-focused investors, REITs function like long-term bonds, offering regular payouts from stable property portfolios. When evaluating REITs, focus on strong sponsors, consistent distribution per unit (DPU) records, and appropriate position sizing based on your risk tolerance. 

 With many Singapore REITs now trading at discounted valuations, the current environment may offer long-term investors an attractive opportunity to lock in 6–7% yields and grow passive income.

Finsum: Timing also matters, you can either build positions gradually or take advantage of market pullbacks to invest more heavily

Dividend investors may find the S&P 500's current 1.2% yield underwhelming, but targeted ETFs offer an appealing solution. The Schwab U.S. Dividend Equity ETF delivers a 3.6% yield by focusing on high-quality companies with strong financials and a history of at least 10 consecutive years of dividend growth. 

Alternatively, the SPDR Portfolio S&P 500 High Dividend ETF emphasizes pure yield, offering a 4.3% yield by selecting the 80 highest-yielding stocks in the S&P 500. While the Schwab ETF prioritizes financial strength and diversification, the SPDR ETF leans into concentrated sectors like real estate and utilities, introducing some risk. 

Pairing the two ETFs can balance yield and quality, creating a diversified income stream for investors. 

Finsum: For those pursuing passive income, these ETFs provide accessible, tailored options that cater to varying investment goals and risk tolerances.

PGIM, the investment management arm of Prudential Financial, launched two new laddered funds of buffer ETFs: the PGIM Laddered Fund of Buffer 12 ETF (BUFP) and the PGIM Laddered Fund of Buffer 20 ETF (PBFR) on the Cboe BZX. These ETFs offer U.S. large-cap equity exposure with limited downside protection and an upside cap on appreciation. 

BUFP invests equally in 12 PGIM U.S. Large-Cap Buffer 12 ETFs, while PBFR invests in 12 PGIM U.S. Large-Cap Buffer 20 ETFs. These funds, the lowest-cost buffer ETFs in the market with a 0.50% net expense ratio, aim to help investors navigate market volatility. 

Buffer ETFs provide the advantage of downside protection during market declines but come with the disadvantage of capped gains during market rallies.

Finsum: Lowering the costs of buffer ETFs could be wildly beneficial particularly when they seem so well poised for our current environment. 

What is the best way to manage a portfolio in an era with less structural disinflation, and how can you improve upon the 60/40 in the current environment 

 The traditional 60/40 portfolio, consisting of 60% stocks and 40% bonds, has long been a benchmark, balancing growth from stocks with stability from bonds. However, the historical success of this model relies on a period of declining interest rates and favorable economic conditions in the U.S., which may not persist in the future. 

As interest rates stop declining and inflation potentially rises, the performance of the 60/40 portfolio is expected to be less impressive, especially during high inflation periods when energy and commodities tend to outperform. To better manage portfolios in this new environment, it’s advisable to diversify beyond the 60/40 mix by including assets like commodities, real estate, and cash equivalents to hedge against inflation and provide more stability during economic shifts.

Finsum: We have seen an increased correlation between stocks and bonds in the most recent years suggesting alternative diversification to manage volatility. 

Lincoln Financial Group unveils the 1 Year S&P 500 Dual Trigger account, a pioneering addition to fixed-indexed annuities, offering market adaptability and full downside protection. This innovative option addresses consumer concerns about inflation, investment losses, and market volatility, catering to the 61% of consumers seeking growth and protection in their investments. 

Senior vice president of Annuity Product Management, Daniel Herr, anticipates robust sales approaching $100 billion by 2025, with the introduction of the 1 Year S&P 500 10% Daily Risk Control Trigger expanding growth opportunities.

As millions of Americans transition into retirement annually, Lincoln Financial remains committed to safeguarding their financial futures through diverse investment strategies. Senior vice president of Retirement Solutions Distribution, Tim Seifert, emphasizes the importance of new crediting strategies in empowering retirement planning. 

Finsum: Index annuity offerings offer a great alternative to fixed income for those in or nearing retirement.