Aim to generate a stream of supplemental income with a portfolio of dividend paying assets.
Bond ETFs
While bonds have long been a staple in investor portfolios for income and diversification purposes, bond ETFs offer the additional advantages of low cost, tax efficiency, and ease of use.
Equity Income ETFs
By maintaining exposure to stocks, investors can access growth from equity markets while relying on dividends for income with equity income ETFs.
Alternative Strategies
Widen your scope by investing with a broad range of yield-seeking strategies including traditional and non-traditional sources of income.
Bonds have long been a staple in investor portfolios, offering the potential for income and diversification from stock holdings. Investors have been increasingly turning to bond ETFs due to their low cost, tax efficiency, and ease of use. iShares offers a comprehensive suite of bond ETFs for a wide range of investment objectives.
Financial markets are constantly changing, and even the most experienced investors are bound to have questions. But I'm here to answer them.
I'm Gargi Pal Chaudhuri and these are the web's most searched market questions.
What role do bonds play in a portfolio?
Many investors may see bonds as a safe haven asset class meant to balance out their stocks, but their role is much more nuanced than that.
Traditionally, bonds have been used to diversify holdings, seek income, and, of course, help preserve capital.
Visit iShares.com to view a prospectus, which includes investment objectives, risks, fees, expenses, and other information that you should read and consider carefully before investing.
Investing involves risk, including possible loss of principal.
Bond investors typically receive payments, known as a coupon, on a regular schedule. Whether based on a fixed or floating interest rate, these payments can help generate income.
Return from bonds may help offset the effects of inflation, which could potentially erode the value of your money.
Bonds can help diversify equity portfolios, potentially lowering the risk of all of your investments falling at the same time. Bonds have historically acted as a counterbalance to stocks.
Financial markets are constantly changing, and even the most experienced investors are bound to have questions. But I'm here to answer them.
I'm Gargi Pal Chaudhuri and these are the web's most searched market questions.
What role do bonds play in a portfolio?
Many investors may see bonds as a safe haven asset class meant to balance out their stocks, but their role is much more nuanced than that.
Traditionally, bonds have been used to diversify holdings, seek income, and, of course, help preserve capital.
Visit iShares.com to view a prospectus, which includes investment objectives, risks, fees, expenses, and other information that you should read and consider carefully before investing.
Investing involves risk, including possible loss of principal.
iShares actively managed ETFs are managed by BlackRock Portfolio Managers who seek superior market returns, exposure to specific sectors, or targeted outcomes.
Corporate bonds can provide a steady income stream while helping to preserve more of what you earn.
High yield bonds can offer investors the chance for greater income in return for carrying greater risk.
International bonds may offer yield-seeking investors the potential to draw income from countries around the world (excluding the U.S.).
Consider a diversified approach by investing across bond and income equity ETFs to help you achieve the right balance.
Municipal bonds can help investors pursue tax-advantaged income.
By maintaining exposure to stocks, investors can access potential growth from equity markets while seeking dividends for income with equity income ETFs.
Companies with mature businesses, healthy balance sheets, and strong cash flows have often returned profits to investors in the form of dividends, providing a source of income. These characteristics may also offer resilience in turbulent equity markets, in addition to the potential for income and growth.
Widen the opportunity by investing in traditional and non-traditional sources of income.
This process allows the option seller to seek income through option premiums. As each option expires, new contracts are sold allowing for the chance to create regular income.
iShares’ active call writing strategies provide experienced portfolio managers the flexibility to pursue income and growth. These ETFs sell monthly call options to target enhanced income while applying a data driven stock selection process focused on growth.
Preferred stocks typically offer income along with the growth potential of stocks. Convertible bonds are also uniquely positioned to offer the growth potential of stocks, but with the income and downside risk management characteristics of traditional bonds.
Real estate ETFs invest in real estate companies and real estate investment trusts (REITs), offering attractive income opportunities. Equity REITs provide exposure to rental income in a tax-efficient structure, while mortgage REITs offer investors exposure to income from interest payments.
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Carefully consider the Funds' investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds' prospectuses or, if available, the summary prospectuses, which may be obtained by visiting the iShares Fund and BlackRock Fund prospectus pages. Read the prospectus carefully before investing.
Investing involves risk, including possible loss of principal.
Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in the value of debt securities. Credit risk refers to the possibility that the debt issuer will not be able to make principal and interest payments.
Non-investment-grade debt securities (high-yield/junk bonds) may be subject to greater market fluctuations, risk of default or loss of income and principal than higher-rated securities.
There may be less information on the financial condition of municipal issuers than for public corporations. The market for municipal bonds may be less liquid than for taxable bonds. Some investors may be subject to federal or state income taxes or the Alternative Minimum Tax (AMT). Capital gains distributions, if any, are taxable.
TIPS can provide investors a hedge against inflation, as the inflation adjustment feature helps preserve the purchasing power of the investment. Because of this inflation adjustment feature, inflation protected bonds typically have lower yields than conventional fixed rate bonds and will likely decline in price during periods of deflation, which could result in losses. Government backing applies only to government issued securities, and does not apply to the funds.
Shares of ETFs trade at market price, which may be greater or less than net asset value. The iShares® iBonds® ETFs (“Funds”) will terminate within the month and year in each Fund’s name. An investment in the Fund(s) is not guaranteed, and an investor may experience losses and/or tax consequences, including near or at the termination date. In the final months of each Fund's operation, its portfolio will transition to cash and cash-like instruments. As a result, its yield will tend to move toward prevailing money market rates, and may be lower than the yields of the bonds previously held by the Fund and lower than prevailing yields in the bond market.
Real estate investment trusts ("REITs") are subject to changes in economic conditions, credit risk and interest rate fluctuations.
International investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. These risks often are heightened for investments in emerging/ developing markets or in concentrations of single countries.
There is no guarantee that dividends will be paid.
Preferred stocks are not necessarily correlated with securities markets generally. Rising interest rates may cause the value of the Fund’s investments to decline significantly. Removal of stocks from the index due to maturity, redemption, call features or conversion may cause a decrease in the yield of the index and the Fund.
Diversification and asset allocation may not protect against market risk or loss of principal.
Transactions in shares of ETFs may result in brokerage commissions and will generate tax consequences. All regulated investment companies are obliged to distribute portfolio gains to shareholders.
The strategies discussed are strictly for illustrative and educational purposes and are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. There is no guarantee that any strategies discussed will be effective.
This material contains general information only and does not take into account an individual's financial circumstances. This information should not be relied upon as a primary basis for an investment decision. Rather, an assessment should be made as to whether the information is appropriate in individual circumstances and consideration should be given to talking to a financial professional before making an investment decision.
The Funds are distributed by BlackRock Investments, LLC (together with its affiliates, "BlackRock").
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by Bloomberg, BlackRock Index Services, LLC, Cboe Global Indices, LLC, Cohen & Steers, European Public Real Estate Association (“EPRA® ”), FTSE International Limited (“FTSE”), ICE Data Indices, LLC, Nasdaq, Inc., NSE Indices Ltd, JPMorgan, JPX Group, London Stock Exchange Group (“LSEG”), MSCI Inc., Markit Indices Limited, Morningstar, Inc., Nasdaq, Inc., National Association of Real Estate Investment Trusts (“NAREIT”), Nikkei, Inc., Russell, S&P Dow Jones Indices LLC or STOXX Ltd. None of these companies make any representation regarding the advisability of investing in the Funds. With the exception of BlackRock Index Services, LLC, who is an affiliate, BlackRock Investments, LLC is not affiliated with the companies listed above.
Neither FTSE, LSEG, nor NAREIT makes any warranty regarding the FTSE Nareit Equity REITS Index, FTSE Nareit All Residential Capped Index or FTSE Nareit All Mortgage Capped Index. Neither FTSE, EPRA, LSEG, nor NAREIT makes any warranty regarding the FTSE EPRA Nareit Developed ex-U.S. Index, FTSE EPRA Nareit Developed Green Target Index or FTSE EPRA Nareit Global REITs Index. “FTSE®” is a trademark of London Stock Exchange Group companies and is used by FTSE under license.
© 2024 BlackRock, Inc or its affiliates. All Rights Reserved. BLACKROCK, iSHARES, iBONDS, LIFEPATH, ALADDIN and the iShares Core Graphic are trademarks of BlackRock, Inc. or its affiliates. All other trademarks are those of their respective owners.
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