Ben Graham style income
"I believe the market has hit bottom, buying opportunities are the best in decades," says J. Royden Ward. The editor of The Cabot Benjamin Graham Value Letter eye two income ETFs.
"iShares $ Invest Grade Corp Bond ETF (NYSE: LQD) seeks investment results that correspond generally to the price and yield performance of a segment of the U.S. investment-grade corporate bond market as defined by the iBoxx $ Liquid Investment-Grade index.
"The fund typically invests at least 95% of assets in investment grade corporate bonds. LQD shares declined sharply during the September/October liquidity crisis, but are now recovering. We forecast further recovery for corporate bonds as the economic picture begins to improve.
"The expense fee of 0.15% is very low. The dividend yield of 6.0% is attractive and dividends are paid monthly. Buy LQD for steady returns.
"SPDR Lehman Municipal Bond ETF (NYSE: TFI) seeks to provide investment results that correspond to the U.S. long term tax-exempt bond market, including state and local general obligation bonds, revenue bonds, pre-refunded bonds and insured bonds.
"The income that TFI provides is exempt from Federal income taxes. The fund tracks the price and yield performance of the Lehman Brothers Municipal Managed Money index.
"Many municipalities, large and small, will experience budget problems in 2009, but bankruptcies are unlikely. The wide gap between 10-year Treasury Notes and Municipal Bonds (2.6% compared to 3.9%) should attract investors to the higher yielding Muni Bonds and ETFs."
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