Q: Curious what you think about SYLD? Is this something you would recommend? If so how much of a fixed income portfolio should it represent? If not, do you have other suggestions? Looking to increase returns of my fixed income investments as I get closer to retirement.
5i Research Answer:
SYLD is a high-yield, actively managed bond ETF. SYLD targets companies with highly levered balance sheets in industries of decline. It has $307M in net assets and charges a high fee at 0.80% due to its active management. It is up nearly 15% over the last year and pays a 6% yield. While there are risks given the high yield focus of the ETF, it could perfrom well as rates come down. We think it could be a decent fixed income allocation in a portfolio but we cannot personalize our answer. XHY could be an alternative high-yield option for a lower fee option charging 0.56%.