Like a more conventional, open-ended mutual fund, these closed-end ETFs are made up of a basket of various securities — typically both stocks and bonds — that are carefully balanced to generate a certain targeted income. Because they often have hundreds of holdings in various sectors and asset classes, these funds make it much easier to diversify your portfolio.
There really is a beauty in non-correlating assets. And I’m in the business of finding things that offset each other, as we’re in an economy that’s seesawing between growth and no growth, the Fed stepping on the gas and then the next moment talking about stepping on the brake.
At times like these, you really want to have investments that are taking advantage of the stock market while not fully abandoning the bonds. You want to have commodity exposure in case the dollar drops, you want inflation exposure, even some deflation exposure, different kinds of debt class exposure, and global exposure. All of that is important to more or less just maintain an even keel.
It can be enough to make your head spin — but, as I said, these ETFs’ managers are drilling down into all of this for you. An investor’s only job is to do the homework and pick the best funds … and that’s where I come in. Here are my top two ETFs that income investors should purchase this week.