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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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My Diversified, High-Yield Portfolio |
Seeking Alpha - April 18, 2011 - by Jeffrey Gall
I have created a diversified, high-yielding portfolio comprised of stocks, preferred stocks, ETFs, and closed-end funds. This portfolio has a current yield of 8.5% and is constructed to provide nice risk-adjusted returns. The performance of this portfolio will be updated every quarter going forward, and its total return will be compared to that of the S&P 500 (SPY). All of the holdings are detailed below.
Portfolio Summary
This high-yielding, diversified portfolio features 19 different holdings:
1. AESAY.PK - Aes Tiete SA – Brazilian utility company - AES owns and operates ten hydro power plants in the state of Sao Paulo. This recent Seeking Alpha article highlights the motivation for owning this investment:
The economy is projected to grow by 5.5% this year. Currently, plenty of opportunities abound at attractive prices for long-term and yield-hungry investors. Those looking to gain some exposure to Brazilian equities can consider the fast-growing electric utility sector as this sector benefits strongly from economic growth. Brazil has the third largest electricity sector in the western hemisphere after the U.S. and Canada.
2. ARR – Armour Residential REIT – US REIT - Focused on investing in Agency residential mortgage-backed securities. ARMOUR's residential mortgage-backed securities portfolio consists of hybrid adjustable-rate, adjustable-rate and fixed-rate residential mortgage-backed securities issued or guaranteed by the United States Government-chartered entities.
Definitely the riskiest holding in this portfolio, but I believe to be well compensated for the risk with a 20% yield. ARR has recently completed two secondaries in the last few months. ARR makes its money based on the shape of the yield curve (borrows short term, lends long term). Given the near historic highs of the yield curve (as discussed here ), ARR is well-positioned (at least in the short term) to maintain its robust yield.
3. CQP – Cheniere Energy MLP – MLP - Houston-based energy company primarily engaged in LNG-related businesses.
CQP was trading at 20+ up until a few months ago. Centerbridge Partners, made the claim about a month ago that a Cheniere subsidiary is in default on its senior debt notes. The stock price dropped significantly to 15 the following day, and has rebounded somewhat to 18. Prior to the claim from Centerbridge, CQP re-affirmed its annual dividend of 1.70. I see no reason why CQP will not pay 1.70 this year. At its current price, CQP is yielding 9.35%.
4. CHK+D – Chesapeake Energy Preferred - The second-largest producer of natural gas, a Top 20 producer of oil and natural gas liquids and the most active driller of new wells in the U.S., CHK+D is a convertible preferred, and does not have a regular call price. 1 share of CHK+D can be converted to 2.264 common shares. The current payout is $4.50 per year with a yield of 4.6%.
I'm a big fan of convertible preferred stocks (as is Warren Buffett). They provide you with downside protection based on a pre-determined payout amount (i.e. the yield will never get too high), are senior to common stocks, and provide you with upside if the common stock ends up moving significantly upwards.
For the complete article.
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| Stuff to look at |
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| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
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