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Where Investors Are Finding Yield in Today's Market

While navigating these uncertain times, investors are focused on mitigating their risk while investing in products that will deliver consistent, high yields. An article from Kiplinger presented numerous alternatives to earn yield in today’s market. Below is a list of those options along with potential yield to investors.

 

Short-Term Cash Investments: 0%-2%

Despite these rates rising with the Fed’s short-term interest rate, they still lose purchasing power in today’s inflationary environment. Though these investments do offer the greatest liquidity of any of the options.

Municipal Bonds: 2%

Yields have come up with the rate increases, however they still remain well below the current inflation trend. The interest on these state and local bonds is free from federal taxes, along with state and local taxes.

Investment Grade Bonds: 1%-7%

The returns on these bonds are subject to interest rate risk and, for corporate bonds, credit risk as well. Currently, I bonds are delivering strong yield, though investors can only purchase $10,000 per person, per year.

Real Estate Investment Trusts: 3%-5%

Depending on the type of real estate in the investment, these can provide stable yield during volatile market conditions. Because the yield is tied to rent, the lease terms typically dictate how reactive the yield to investors is during inflationary periods.

High-Yield Bonds: 3%-6%

Also known as junk bonds, these are issued by sub-investment-grade companies and tend to move more in sync with stocks than treasuries. There is a higher risk of default, though the historical average has been 4% to 5%.

Dividend Stocks: 3%-6%

Dividend yields available on stocks are often higher then on bonds from the same corporations, however they are much more volatile and could suffer more in a recession.

Midstream Energy Infrastructure: 5%-6%

These include companies engaged in the processing, storage and transportation of oil and natural gas around the country through pipelines. Yields in this sector can be volatile, would most likely suffer in a recession and are subject to regulatory risk.

Closed-End Funds: 5%-9%

Raising money through an IPO to invest in stocks, bonds, MLPs and other financial assets, these funds also use leverage to purchase portfolio assets. This can augment returns in up markets, but can magnify the decline of a fund’s net asset value in hard times.

 

The ZINC Income Fund has delivered an average 8% yield to investors since inception from being the capital provider for ZINC’s private loans for real estate investment rehabs and resales. The fund’s return sits at the top of Kiplinger’s list of yield opportunities, offering favorable risk adjusted returns to investors.

 

The Fund adheres to the follow strategy to mitigate your investment risk:

  • Provide short term loans up to 12 months in a niche real estate market
  • Target prime borrowers, average fund FICO score of 714
  • Spread risk across multiple loans, with no one loan being more than 2% of the fund’s capital
  • Concentrate on California borrowers with diversification in 9 other states
  • Service loans in house to ensure timely monthly installments and re-payment of debt

 

Interested in learning how you can start earning an 8% yield from the ZINC Income Fund? Click here to request the offering documents for the fund.

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