FMD Capital Management

Posts Tagged: income investing

New ETF Takes A Smart Look At Small Cap Dividend Stocks

Written by David Fabian, March 21st, 2017

Small cap stocks are traditionally known as centers of growth in the global capital markets.  These companies often demonstrate greater risk due to their diminished market footprint.  However, they also offer compelling performance and diversification dynamics for investors with a higher risk tolerance.

Most exchange-traded funds that track this segment are focused on broad swaths of the small cap category.  They typically own hundreds, if not thousands, of individual stocks with market capitalization’s of less than $2-$3 billion.

Read the complete article at NASDAQ.com

ETF Investors Seek Shelter In Investment Grade Corporate Bonds

Written by David Fabian, March 07th, 2017

Rising interest rates are making many bond fund investors nervous about the prospects for weakening future returns and unstable risk dynamics.  This fear is putting some fuel behind ETF strategies that short Treasuries or sectors such as bank loans that have historically performed well in a rising rate environment.

The PowerShares Bank Loan Portfolio (BKLN), which invests in a basket of floating rate notes and senior loans, has accumulated more than $2.4 billion since the U.S. election.  That confidence has so far been rewarded with a steadily rising price trend versus the volatility that has pervaded most aggregate bond benchmarks.

Read the complete article at NASDAQ.com

Are High Yield ETFs Becoming Too Hot To Handle?

Written by David Fabian, February 17th, 2017

Love is in the air this Valentines week and many income investors are smitten with the returns of their high yield investments.  The steady march higher in assets like junk bonds, preferred stocks, emerging market debt, and even leveraged closed-end funds has remunerated shareholders for their faith.

The poster child of this strength may well be the iShares iBoxx $ High Yield Corporate Bond ETF (HYG).  This well-known fund, which invests in a passive index of high yield U.S. corporate debt, has gained more than 22% over the last year.  That jump includes both price gains and income distribution over a 52-week period.  It also bests every corner of the U.S. fixed-income sector map by a wide margin.  Read more

Emerging Market Bonds: Time For Local Currency To Shine?

Written by David Fabian, February 02nd, 2017

Emerging market bonds were one of the few bright spots across the fixed-income landscape in 2016.  This category trailed only U.S. high yield debt by total return metrics despite some meaningful volatility in the aftermath of the U.S. election.  Investors also took notice of this outperformance and the favorable yields to bootRead more

The Downfall of A ‘Yield At Any Price’ Strategy

Written by David Fabian, January 25th, 2017

Many investors are familiar with the GARP acronym, which stands for Growth At A Reasonable Price.  The basic definition is to uncover stocks with reasonable fundamentals (undervalued) that have sustainable growth potential.  The methodology seems sound and is essentially a way of saying – don’t chase price simply for the sake of recent performance.

On the flip side of that ideology is a perilous path that I have seen many investors tread in recent years.  I call it “Yield at Any Price” or YAAP.  Read more