Desperately Seeking Yield: October 20, 2020, Edition

Seeking AlphaFinancial Advisor | Fixed IncomeDesperately Seeking Yield: October 20, 2020, EditionOct. 21, 2020 4:55 AM ET|| Includes: BND, BWX, EMLC, IHY, JNK, PICB, TIP, VEA, VNQ, VNQI, VTI, VWO, WIPby: James PicernoJames Picerno Macro, economy, Long OnlySummaryThe average trailing yield has ticked up for an equal-weighted mix of the major asset classes.
VNQI's outlier status for payout has been fueled by a tepid rebound after the coronavirus crash in the spring and so payout relative to price looks relatively elevated.
The main takeaway: you can probably earn a higher payout vs. what the usual suspects offer in government securities.
More than a year ago I reviewed Mr. Market's offerings for yield-hungry investors and the results were meager, at least in comparison with historical payouts. How does the search-and-explore exercise compare today? Yields on government bonds have fallen sharply and so one would expect that slim pickings have become more so. Actually, the average trailing yield has ticked up for an equal-weighted mix of the major asset classes.
The average yield on this portfolio is 3.22%, based on the trailing 12-month payout as of Monday (Oct. 19) via Morningstar.com. That's up slightly from 3.06% on Aug. 30, 2019. Here's how the various ETF proxies compare (in descending order according to the latest payout).

At the top of the list is an alluring 7.49% trailing 12-month yield for foreign property shares by way of Vanguard Global ex-US Real Estate (VNQI). Property shares generally offer relatively high yields but VNQI's outlier status for payout has been fueled by a tepid rebound after the coronavirus crash in the spring and so payout relative to price looks relatively elevated.
For comparison, the 10-year Treasury yield is a comparatively thin 0.78%, or roughly half the level from the Aug. 30, 2019 rate. Even more dramatic declines have been recorded for 2-year and 3-month Treasuries.
The obvious question: How could Mr.... Read more