Nasdaq: Investors Need Yield

A recent article published on Nasdaq.com, “Fake It or Make It: Call It What You Like, But Investors Need Yield”, discusses the importance of investors attaining yield in their retirement years. 10,000 people a day retire and need a steady, dependable and consistent distribution from their investment portfolios. In an era of near zero interest rates, few investors have sufficient retirement savings to live off the income produced by a portfolio of low-risk bank deposits and Treasurys. Investors can strive to address this shortfall by reaching down the scale of fixed-income credit quality (to aptly named “junk” bonds) or through exposure to high volatility, high-yielding alternative asset classes. While either of these options may produce modestly higher levels of current income, both come at a cost of significantly increased volatility and neither addresses the reality that retirees require high-distribution solutions that minimize the risk of idiosyncratic market dislocations.

The Nasdaq article highlights the following topics regarding investors needing yield in their retirement years:

• In an era of near zero interest rates, investors must look for other solutions to attain a steady stream of monthly income.
• Investors face a difficult task of selecting from the plethora of multi-asset income solutions, since these strategies are not all the same.
• Another concern is how do investors earn market returns at a level of risk that is reasonable to them in order to receive a steady stream of income that covers their monthly expenses.

The Nasdaq article goes on to discuss HANDLS™ Indexes: distribution efficient frontier, including the following:

• Approximately 70% fixed income and 30% equity, harmoniously balanced, to produce what is believed to be a sustainable distribution defined by long-term expected total return.
• Uniquely positioned as a benchmark for any high yielding strategy or multi-asset income fund because the rate is fixed by formula, not defined by pass-through.
• Built from a common optimized portfolio that relies upon the benefits of diversification to seek higher risk adjusted returns.
• Distributions can be calibrated to any target rate by applying a leverage (or deleverage) factor to the basket.

To learn more about the HANDLS Indexes please click here www.HANDLSindexes.com.