Rising Rates ETF Portfolio

By David Fabian:Recently, a new breed of high-yield exchange-traded funds have been released that seek to mitigate the risk of rising interest rates by combining long positions in high-yield debt with short positions in U.S. Treasuries.

Frank J. Constantino submits:Interest rates are going to rise. It isn't a matter of if, but when. Rising rates can cause severe headaches for fixed income investors. As interest rates rise, bond yields rise, pushing bond prices down. This is especially problematic for investors who own bond funds or do not hold their bonds to maturity.

ByRobert Wagner:Recently I wrote an article titled "Why Long-Term Bonds are the 'Dumbest investment.'" This article is the first in a series to explore alternatives to holding long-term government bonds in a portfolio, and develop possible strategies to structure fixed-income, balanced and/or target retirement portfolios for a rising rate environment.

By Tom Lydon: After the multi-decade long rally in the Treasuries market, yields are now hovering around historic low rates. If you are wary of a potential rising rate environment, short duration and inverse Treasury exchange traded funds could help mitigate the risks in a fixed-income portfolio.

By Brad Kenagy:For this article I will be writing about a high yield portfolio, in response to a comment I had on a previous article about simple portfolio building. For this portfolio I will be using a new free ETF screener that I recently discovered on Fidelity's website here.

MyPlanIQ submits:Treasuries were in a slump last week on improved economic fundamentals. As the economic recovery continues to solidify one must allow for the possibility that interest rates will rise further when adjusting their fixed-income portfolios. By examining the following trend score table for bond ETFs that represent various fixed income subclasses, one can gain some insights into the current fixed income market:

By Brad Kenagy:I decided to write this article because I just finished a series of articles about Simple Portfolio Building and a reoccurring theme from those articles was the impact of rising rates on the bonds in each of the portfolios. So I thought to myself "hey I'll try and build a portfolio that does not have bonds but has close to the same return and volatility as bonds."I had a couple goals/criteria that I wanted for the portfolio, and they are listed below.

By Brad Kenagy:In this article, I will construct a portfolio of "unhealthy" stocks, which would make New York mayor Michael Bloomberg cringe! but the stocks could be good for your investment portfolio. For my article, I will look for large cap stocks, which pay a dividend and have grown earnings in the past year. I will look for companies in the following industries: soft drinks, alcoholic beverages, cigarettes, candy producers, and fast food restaurants.