Displaying items by tag: income

Two bills currently in Congress could expand a deferred annuity known as the Qualified Longevity Annuity Contract (QLAC). Both the House and Senate are working on retirement savings legislation that would increase the allowable size of QLACs, making them more attractive to middle-income retirees. QLACs work like any fixed annuity. They pay a steady monthly income, but payments are deferred until the holder is at least 75 years of age. This means that you can buy a QLAC for a lower initial investment than immediate annuities. However, you can invest no more than $135,000 or 25% of your total retirement account balance over your lifetime. A Senate bill called the Enhancing American Retirement Now (EARN) Act, would raise the maximum investment to $200,000 and eliminate the 25 percent threshold, while a House bill, called the Securing a Strong Retirement Act, or SECURE 2.0, would repeal the 25 percent limit. The Senate bill has bipartisan support and the House bill passed last Spring. It appears Congress is looking to build a market for these products by raising the cap on maximum investments.


Finsum: Both houses of Congress are working on legislation that would increase the appeal of a deferred annuity called the Qualified Longevity Annuity Contract.

Published in Wealth Management
Monday, 05 September 2022 11:59

NEOS Investments Launches 2 Options-Based Bond ETFs

NEOS Investments, an investment firm specializing in options-based income solutions, launched three actively managed ETFs this week, including two fixed income ETFs designed to help advisors and investors navigate the current market environment. The NEOS Enhanced Income Aggregate Bond ETF (BNDI) generates monthly income from investing in a representative portfolio of the U.S. Aggregate Bond Market and implementing a data-driven put option strategy. The NEOS Enhanced Income Cash Alternative ETF (CSHI) generates monthly income from investing in a portfolio of 1–3-month Treasury Bills and implementing a data-driven put option strategy. Both ETFs, which now trade on the NYSE, utilize a put spread approach that involves selling short puts and buying long puts to generate option premiums to be distributed as income without taking on outsized risk.


Finsum:Options-based investmentfirmNEOSrecently launched two fixed income ETFsoffering investors a novel approach to monthly income.

Published in Bonds: Total Market
Tuesday, 17 May 2022 17:26

Liquid Fixed Income ETFs are the Ticket

State Street launched a new fund LQIG which started trading on May 12, an effort to give investors exposure to liquid bonds with high traceability. The market is rife with turmoil, and investors are looking to different fixed-income products to provide an inflation-beating yield and relatively liquid assets. The fund seeks exposure to 400 investment-grade corporate bonds denominated in dollars. These differ from most fixed-income funds which are designed to give broader market exposure that doesn’t prioritize traceability. The high traceability comes with lower bid-ask spreads as well as more transparency into their holding's real-time valuations.


Finsum: Investment-grade corporate debt is looking relatively more attractive with market volatility at such highs.

Published in Bonds: Total Market
Wednesday, 04 May 2022 17:34

Fidelity is Expanding its Model Options

Model portfolios continue to grow in prominence among advisors. Every quarter, a higher percentage of advisors are adopting models and AUM has been growing considerably. Some evidence suggests a lot of the AUM growth is coming from some “power users” but the movement is still broad-based. On the back of that growth, Fidelity is expanding its suite of popular model portfolios. The company has launched Fidelity Target Allocation Tax-Aware Model Portfolios, which include nine equity and fixed income mixes, each versioned for I and Z share classes. The models are available through its managed account platform, Fidelity Managed Account Xchange (FMAX), and the Envestnet platform.


FINSUM: Models are making it easier and easier for advisors to manage money and save time, which boosts margins and enhances client service overall.

Published in Wealth Management
Friday, 29 April 2022 12:42

REITs For Dividend Income

Most people think of alternatives as either a hedge in their portfolio against traditional market swings, or a big return generator with more risk, but REITs can be a great income generator. Dynex Captial is a great REIT with a 10.38% dividend as of April, and Citadel is a huge holder in the company. Gladstone Commercial real estate has a strong 6.71% dividend and never misses its distribution so it’s ultra-reliable. Finally, LTC Properties has a similar 6.31% dividend but has strong hedge fund love.  Their recent acquisition of LuxeRehab is a signal of their strength and has a good track record with tenants.


Finsum: REITs have lots of dividend options and are a good income alternative for those seeking a solution in this market, however it does have risk. 

Published in Markets
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