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☆ These bond funds are among the top performers in 2023 – Here’s what investors should do next
▼ + stars: | 2023-11-21 | by ( Darla Mercado | Cfp | ) www.cnbc.com time to read: +5 min

Risk-taking investors also fared well in high-yield bonds, as the fund category generated a 2023 total return of 6.98% through Friday. Big performers in that category include the Pacific Income Advisors High Yield (MACS) Fund (PIAMX) for investors with managed accounts. The BondBloxx CCC Rated USD High Yield Corporate Bond ETF (XCCC) was also among the strongest performers in the fund category. See below for a list of top performing high yield bond funds, according to Morningstar Direct. "I think these historically high yields have offered attractive entry points for high quality," said Murphy.

Persons: It's, Morningstar, it's, Thomas Murphy, Rowe, Murphy Organizations: Treasury, U.S, Morningstar, Morningstar . Bank, SEC, Pacific Income, PIAMX, Morningstar Direct Locations: U.S

☆ This year’s hot yields could be 2024’s tax hit. Here’s how to prepare
▼ + stars: | 2023-09-08 | by ( Darla Mercado | Cfp | ) www.cnbc.com time to read: +4 min

The Crane 100 Money Fund Index has an annualized 7-day current yield of 5.16% as of Thursday. This way, you're deferring the tax hit on the income until you begin to draw down from the account. To that effect, some money market funds invest in municipal bonds and thus produce tax-exempt income. Investors in high-tax locales may be especially interested in state-specific tax-exempt money market funds. The Fidelity New York Municipal Money Market Fund (FAWXX) carries an expense ratio of 0.42%, and it has a 7-day yield of 3.34%.

Persons: US3M, Tim Steffen, Baird, you've, Jerrod Pearce, Pearce, Steffen Organizations: Internal Revenue Service, Creative Planning, Vanguard, Money Market Fund, SEC, Fidelity New York Municipal Money Market Fund Locations: Vanguard California

☆ The Federal Reserve is likely to keep rates high. Here's a strategy to generate income and reduce risk
▼ + stars: | 2023-08-03 | by ( Darla Mercado | Cfp | ) www.cnbc.com time to read: +2 min

Near-dated Treasurys have seen a sizeable boost since the Federal Reserve has embarked on its rate-hiking campaign, and a strategy that allows investors to generate income in the short term is taking off. To that effect, the firm this week launched a trio of Treasury bond laddering strategies: six-month, 12-month and 24-month offerings, managed by its Wasmer Schroeder Strategies team. "There are two bond investors: total return and income," Lafferty said. "For income investors, those higher yields are still at the shorter end, and these might be people who are pulling income out of their portfolio or retirees who need to spend their current income," he added. For investors who are thinking longer term, Schwab offers 5-year to 15-year ladders, as well as a 1-year to 5-year variety.

Persons: Bond, Charles Schwab, Warren Buffett, US3M, David Lafferty, Schroeder, Lafferty, Schwab Organizations: Federal Reserve, Schwab Asset Management, Treasury

☆ The Fed’s expected rate hike is about to sweeten yields on these investments
▼ + stars: | 2023-07-26 | by ( Darla Mercado | Cfp | ) www.cnbc.com time to read: +4 min

The Federal Reserve is widely expected to boost interest rates by another quarter percentage point Wednesday afternoon – and that's terrific news for fixed income investors hoping to grab a little more yield. Since March 2022, the central bank has raised rates 10 times – with July's expected hike marking the 11 th increase – to cool inflation. Consider that during the week of March 11, 2022, the rate on the 2-year Treasury note was 1.75%, according to Refinitiv. Investors who wish to squeeze a little more interest income from their cash holdings have opted for Treasury bills, with the 6-month bill yielding 5.5%. By buying multiple notes of different maturities, investors can "ladder" these Treasurys and reinvest the proceeds from maturing bonds into longer-dated issues.

Persons: Greg McBride, maturities, tradeoffs, McBride, SLM —, Sallie Mae —, Nick Wells Organizations: Federal Reserve, Investors, Treasury, Bank of Locations: Bank of Indiana, Treasurys

☆ Here's the next yield play for fixed income as rates peak, according to BlackRock
▼ + stars: | 2023-06-30 | by ( Darla Mercado | Cfp | ) www.cnbc.com time to read: +2 min

There is more to juicing yield than hiding out in money market funds, and BlackRock says now is the time to hop into high-quality fixed income. Indeed, the combination of higher interest rates and an inverted yield curve has made money market funds and Treasury bills tempting. "As rates appear set to peak with the approaching end of the Fed's hiking cycle, investors may want to consider stepping into high-quality, medium-term fixed income." BlackRock noted that intermediate and long-term fixed income exchange-traded funds have received $27.6 billion in inflows year to date, 15% greater than the amount of cash hitting their short-term counterparts. "At these levels, we believe investors are adequately compensated for long-term inflationary risk, given many EM central banks target ~3% inflation," the firm noted.

Persons: US3M Organizations: BlackRock, Federal Reserve

☆ The U.S. reached a deal on the debt ceiling. Here’s what might be next for investors in Treasurys
▼ + stars: | 2023-06-04 | by ( Darla Mercado | Cfp | ) www.cnbc.com time to read: +3 min

The worst of the debt ceiling crisis is over now that lawmakers have passed a bill and sent it to President Joe Biden for signing, but investors are about to see an influx of Treasury securities enter the market. A large issuance of new Treasurys could push down prices of holdings in investors' portfolios. While large investors scoop up the new T-bills, the extent to which individual investors capture the benefit will also depend on the Federal Reserve's policy stance. "As you get past the debt ceiling, getting paid on your cash is still a concern, and doing it with T-bills where you still get a 5% yield is attractive," Tannuzzo said. "Interest rates have been so low, and to see 4%, 5% on T-bills – you can make money on money, and that's wonderful," Shagawat said.

Persons: Joe Biden, Morgan Stanley, Gene Tannuzzo, Tannuzzo, James Shagawat, Greg McBride, Shagawat, Treasurys, he's, Michael Bloom Organizations: Treasury, Columbia, Federal, Federal Reserve, AdvicePeriod

☆ Get paid for doing nothing: What you should know about cash sweep accounts
▼ + stars: | 2023-05-19 | by ( Darla Mercado | Cfp | ) www.cnbc.com time to read: +4 min

Doing nothing pays these days — at least that's the case if you're talking about cash that's sitting in your brokerage account. Consider Fidelity Investments is offering a 2.6% APY on its cash management account, but LPL Financial pays 0.45% on its insured cash account for clients with $300,000 to $500,000 in household value. First, examine your goals for the money before you shop around for cash sweep rates. Finally, if you do pile cash into your sweep account, think about the tax implications of doing so. Some firms offer different options for investing your cash sweep account, including a municipal money market fund for investors who reside in high-tax states.

☆ Online banks sweeten CD rates as institutions compete for deposits
▼ + stars: | 2023-05-03 | by ( Darla Mercado | Cfp | ) www.cnbc.com time to read: +3 min

Online banks are boosting rates on savings accounts and certificates of deposits as fear of deposit flight plagues regional institutions. Bread offers an annual percentage yield (APY) of 5.2% on a one-year CD and 4.65% APY on savings accounts. Capital One has an APY of 3.75% on its savings account, and it pays 4.15% APY for a one-year online CD. Other online institutions paying attractive rates on one-year CDs include Synchrony Financial, which pays 4.75% APY, and Ally Bank, which offers a 4.5% APY. Analysts expect higher rates from online banks to spur other institutions to raise their deposit betas – that is, the amount by which rates paid to customers increases following a boost in the fed funds rate.

☆ Six-month Treasury yield tops 5%. Here’s how you can put your idle cash to work
▼ + stars: | 2023-02-23 | by ( Darla Mercado | Cfp | ) www.cnbc.com time to read: +3 min

Rates on U.S. Treasurys have spurted even higher, and that means you don't have to look too far to safely grab some yield for your cash holdings. The yield on six-month Treasurys have surpassed 5%, and even 1-month bills tout rates of 4.5%. Further, you can put the same concept to work with short-dated Treasurys to get a little more yield on your cash and do so safely. Risk management and ladders When interest rates are rising, you can reinvest the proceeds of the maturing bonds in your ladder into a longer-dated issue. In a falling rate environment, you can count on the bonds that have already locked in the higher yields.

☆ Bond yields are hot, but be smart how you invest. Here’s where to begin
▼ + stars: | 2023-02-06 | by ( Darla Mercado | Cfp | ) www.cnbc.com time to read: +6 min

Bond yields and prices move inversely to each other so, as rates rose, prices tumbled – and did so at an inopportune time since stocks were suffering, too. Thus, they have higher interest rate risk and greater price fluctuation. He likes short-term Treasury bond funds and ETFs. Another way to mitigate interest rate risk is to use a barbell: You hold equal amounts of shorter and longer-dated issues. "You don't have to reach too far in terms of credit risk and interest rate risk to capture healthy yield in today's environment."

☆ Interest rates are high. Here’s a relatively safe way to squeeze more from your cash
▼ + stars: | 2023-01-25 | by ( Darla Mercado | Cfp | ) www.cnbc.com time to read: +5 min

Be aware that money market accounts offered by a bank are subject to protection from the Federal Deposit Insurance Corp. This isn't the case with money market funds, which can't guarantee that you won't lose money. When shopping for a money market fund, look for offerings that hold high quality underlying investments, and be sure to keep an eye out for fees. Money market funds that Lawrence likes include the Federated Hermes Prime Cash Obligations Fund (PCOXX) and the Fidelity Tax-Exempt Money Market Fund Premium Class (FZEXX). Unless they're tax exempt, money market fund income is subject to federal, state and local taxes.

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