JBBB
Janus Detroit Street Trust - Janus Henderson B-BBB CLO ETF
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Moving assets to income producing securities should be done before you get to retirement to secure reduce your risk. BND is a good choice but there are many good choices. Funds like JAAA 6% yield, JBBB 7.8%, CLOZ 8%, UTF 7%, and UTG% 6.3%. All have higher yield than BND and other government bond funds and historically are very safe investments. less safe but still not terribly risky are PFFA 8% yield, PBDC 9%. But you also need to factor in your expected income needs. you need to have a good estimate of your income needs in retirement and then gradually work on configuring your portfolio to generate more than that income. IF your account generates more than you need and you reinvest the excess income you will never run out of money.
Hold gold, bitcoin, and bond like stocks such as VZ. Also BDCs like MAIN or a BDC ETF like PBDC. These are not correlated to the equity market directly. On some red days I see all of these go up and vice versa. These will smooth out the volatility. Also hold corporate bond funds like JBBB or JAAA or even STRC which pays 10% and has stable nav.
Instead of HYSA buy JAAA & JBBB.
I would invest in JBBB it has a good yield and is relatively stable.
You could invest the money in JAAA 6% yield and JBBB 8% yield and PFFA 8% UTF 7% and UTG 6%.Thes all invest in different assets and provide a much better yield. These are dividend funds that pay out quarterly or monthly. Some higher yielding options are PBDC 9%, ARDC 10%,EIC 11%, and SPYI 11% the lower yielding funds are safest while the higher yielding funds have slightly higher risk. YOU will have to use a taxable brokerage acount for these funds. Set dividend investment to off. Cash will show up in the account and from there you can move that to your bank account. The higher yield of these funds will probably double your income. Any money you don't spend reinvest it for more income. Your taxes will go up due to the higher income. So you probably will have to make some adjustments to your tax withholding. I strongly suggest you read the book The Income Factory. and look at Armchair income on youtube.
An investment account like Fidelity. JBBB is a CLO that pays over 8 percent. Its a corporate bond fund.
What type of an account? Where do you park something like JBBB or JAAA?
Yeah. Open an investment account and put 5k to start in a high yield fund like JBBB. Its over 8 percent and very stable. People say Roth ira but I would recommend building an advanced emergency fund that produces income you can use when laid off. I have 160k in an income portfolio and 40k in emergency HYSA. The income portfolio is diversified and pays a mix of high and low yield.
HYSA, JAAA, or JBBB. I hold most of my money needed in the short term in JBBB. It pays about 7-8% with a monthly dividend, and the prices stay very stable. JAAA is the less volatile of the two, but only pays about 6%. Rate cuts are incoming, so those yields will go down as the loans in the portfolio mature.
JAAA or JBBB if you’re feeling a little frisky.
No, a lot of stuff is going down this week. The Fed meeting happens, and while it’s almost a lock that they won’t cut, people are wanting to see if they forecast anything or want the other Fed board members say or vote on. Secondly, the jobs report comes out as well. Lastly, it’s an important week for corporate earnings with Amazon, Apple, Meta and Microsoft. If above estimates and guidance is good, market up. If they underperform or cut guidance, then a drop may happen. While nobody knows from day to day, (I m an advisor and this market is not logical) especially with this admin, I would dollar cost average into the market and you can have the funds in a CLO ETF while waiting for 3 or 6 months. That way, it avoids market timing, which is my all VA’s (variable annuity) have that option to smooth out your average price. On CLO thing, JAAA or PAAA is safer or can go w/JBBB for interest, but it’s a little more volatile/risky as rating suggests.
This is exactly what I would recommend OP do, but I answered JAAA/JBBB because of the ask.
JAAA. It’s a low risk fund made up of loans with AAA credit rating. Pays about 6% annual yield on a monthly basis. It’s very safe and conservative. I trust it more than treasury bonds. You can also try JBBB. A little more risk, but also more yield closer to 8% paid monthly.
7-10 years is a big time frame for a HYSA but a bit iffy for the S&P. If I were in your shoes and had any portion that was saved outside the emergency fund that I wanted to put towards the House, I might consider shopping around for a 5-6 yr CD as I’m expecting rates to drop. I could also consider going in with a low-to-medium risk corporate bond, something like JAAA or slightly more risky or with higher yield like JBBB. If I were to go into stocks, I’d probably look into something that uses an option strategy to limit potential losses. QQQH from Neos would be one I’d consider in your shoes.
i just picked up some JPAA as my next layer above my SGOV holdings. i wanted to add a layer of JBBB or similar as well but stupid Merrill Lynch blocks it. rage.
How will this affect ETFs like JAAA and JBBB?
>Also reasonable but I think your risk estimate is overly high. Of all the junk bonds issues in a year (mainly from JBBB) only 4% actually go into default. Just to clarify, JBBB does not invest in junk bonds. These CLO tranches differ fundamentally from junk bonds in both structure and risk profile. There have been **no defaults** in the BBB and BB tranches since the GFC and the total cumulative default rate since the early 90s is just 0.28% for BBB and 0.88% for BB tranches. In contrast, junk bonds are unsecured corporate debt with higher default rates, historically averaging 4% annually and significantly lower recovery values. The biggest risk with these is not credit risk but liquidity risk. Unlike junk bonds, the CLO BBB tranches trade over-the-counter in a relatively illiquid secondary market. In a major financial crisis, the market can seize up, causing the NAV to drop sharply. However, if you can hold out, you will continue to get your distributions and they will eventually recover. >Also some funds only invest in senior loan obligations. So if a company goes bankrupt the senior loans would have priority to be payed off by the assets the company has left. So again you are not going to loose all your money. So the risk from CLOA and CLOI might be lower than your think Also having 3 high yield funds reduces the risk even more. This isn't entirely accurate but you are correct that the risk from CLOA and CLOI is probably lower than he thinks.
Reasonable goal so 100K in money market fund or several bond funds. >The remaining 140K will be in fixed income assets, of which 40K (JBBB,CLOZ, CLOI) will pay the highest rate but could default and I could theoretically permanently lose that 40K Also reasonable but I think your risk estimate is overly high. Of all the junk bonds issues in a year (mainly from JBBB) only 4% actually go into default. A good fund manager would know this and would either avoid companes in poor financial condition or have or have bonds from 100 or more companies so that a 4% default rate would mean only 96% of the bonds would pay out as expected. So the loss of 40K is highly unlikely. Worst case the dividend might be reduced slightly in a bad year. Also some funds only invest in senior loan obligations. So if a company goes bankrupt the senior loans would have priority to be payed off by the assets the company has less. So again you are not going to loose all your money. So the risk from CLOA and CLOI might be lower than your think Also having 3 high yield funds reduces the risk significantly. Index funds are good thing to have in a bad economy since they can be sold for cash. But Keep in mind the in a bear market you hav sequence of return risks which can be significant. What I have been doing is a money market for for Cash A mix of high yield stock dividend funds and loan obligations with a goal of about 10 separate funds. With an overall yield of about 8% with enough income from these funds that they would cover my my living expenses if needed. Then Stock index funds for a long term asset I can sell.if needed. So in my case I have a lot more money in high yield funds since I want enough income to cover living expenses. With a smaller ammount in cash and index funds.
Forgot to mention that I plan to gradually move the JBBB, CLOZ, and CLOI (40K total) into VOO. That's the "play" money. For now, I want to keep them somewhere with better yields than SGOV. I know you're not supposed to time the market but I want to have that 40K in hand in case the market tanks later this year due to tariffs, inflation, job losses, or Elon Musk sniffing a bad batch of ketamine. It's fine if I'm wrong and miss out on larger gains. Personally I'd rather risk having smaller gains if it means having a chance to buy at a big discount. Basically, 100K will remain in what I assume are reasonably safe options: SGOV, FLOT, and JAAA. I have both FLOT and JAAA in the mix because they are built differently and presumably would behave differently under a stress. A further "diversification", if you will. The other 40K in cash, which I would not need to withdraw immediately and could wait longer for their prices to bounce back, would remain in these higher-yield places and eventually invested into VOO when there is a dip or bear. TLDR: If I wasn't so greedy I'd just store the "need ASAP" money into SGOV and the rest into stock ETFs, but I *want* to time the market and I want to keep the standby cash into a higher yield place the risk of which is reasonably managed.
The goal is to balance between maximum yield, reduced volatility, and liquidity, so I will likely have access to 100K at any given time without having to sell the stocks. 60K will be in stocks. I won't touch them because there might be a bear market in a few years, who knows. The remaining 140K will be in fixed income assets, of which 40K (JBBB and CLOZ) will pay the highest rate but could default and I could theoretically permanently lose that 40K, leaving me with 100K. I suppose the JAAA and FLOT could also TEMPORARILY lose value but I believe they do not lose value drastically and they recover much faster, which is why I have this "ladder" of safety and risk. Is there a flaw in this logic? I don't want long duration bonds like BND because of how they got decimated in 2022. I cannot rule out another rate hike soon if we have a high inflation so I don't want long term treasuries, but I'm also too greedy to put everything in the "low yield" SGOV. I should also mention that I have taken into account the fact that SGOV is state tax exempt while the others are not. I've also looked up CDs but they seem to pay a lower rate and I'm not a fan of locking up the funds. But I'm open to suggestions.
I think this is overly complicated and don't understand the logic with so many funds. I would put the $100k in SGOV and be done with that portion. Next, for the $100k remaining, decide what your goals and risk tolerance are. For me, I would just put 100% in VOO and be done. If you want the equity portion to be more conservative, do a mix of VOO & JBBB/CLOZ
Being early is the same as being wrong. I am all in on a CD right now, one expires in 6 months the other in 13 months (1 month already down). If the SP500 is lower then than it is now, I will all in into my stable "money storage" port (40% IVV 40% FDVV 5% IHDG 5% JBBB 10% XDTE)
CLO stands for Collateralized Loan Obligation. It’s essentially a type of debt that has some type of collateral against it. Specifically business loans. AAA and BBB are rankings of the loans, based on credit worthiness of the borrower. AAA is the safest rating, then AA, then A, then BBB, then BB. The lower safety it is, the higher the interest rate charged to the borrower. Companies have packaged these loans into ETFs like JAAA, JBBB, ICLO, CLOZ, etc. Like with the interests rates on the loans, the safer ratings yield smaller amounts while riskier ratings yield larger amounts. Safer ratings also see more stable prices while riskier ratings may see more price movement. JAAA and ICLO are currently yielding a little over 6%. JBBB and CLOZ are currently yielding 8% and 8.5% respectively. I categorize these this way: HYSA is extremely safe with no chance of losing money but pays the smallest yield. Good for essential emergency funds I may need access to at any time / less than 48 hours. AAA CLO ETFs are very safe, may see minimal price movements, but yield more than an HYSA. Good for extended savings (like a house down payment or a vacation fund) and emergency fund amounts that I won’t need immediately since it may take a bit of time to sell and transfer them to a bank to become usable (so 1 month of transfer time in the worst case scenario). BBB CLO ETFs are somewhat safe. They could see more price movement but yield more than the AAA CLOs. Best for cash you won’t need for a while as you may need to wait for price recovery before selling. Basically the “last resort” portion of your emergency fund. These also make a decent conservative investment option when rates are high - an 8% return is nothing to sneeze at.
SGOV JAAA JBBB CLOZ SVWXX all variations to keep liquid is valid in current stream,volatility,government etc.
I got a cd paying 4.35%. Could be good for ppl that aren't going to buy for a year. Covid happened in 2020, market spikes in 2021, and crashes in 2022, reversing in late 23. Ill wait until the tariffs have been in effect for at least a year before dca into value funds. Split FDVV, VT, JBBB, SDY and SPY for me. Should net a modest gain of 6 or 7 percent a year
Thanks for your response. It is appreciated. I currently hold JBBB and CLOZ.
why are you even on reddit then thinking about all this? If you are "ignoring it" for 20+ years...you wouldn't even think about the market at all nor care. You'd look as you got closer to the 20 year mark. I have a small pension from part-time work at the library. It's only like $15,000...but I almost NEVER look at it -- because I chose the 8%/year option rather then a self-directed or whatever. I think that's what it is. I've looked at the balance less then the fingers on my hands over the past # of years. The analogy is if one thinks the "market always goes up" and has a average return of \_\_\_%...then don't bother ever looking! Cause it's "in the bag." As for majority of other liquid assets -- I don't have a 20 year time horizon....much shorter. With that said...don't even need to be in equities for my purposes. That's why I was mostly in bonds / fixed income already / MMF. Part of that was in "safer" investments like AAA CLOs, Which I realized wasn't that safe. I exited those in Feb/early March. JAAA / PAAA. At the same time I exited Pimco multi-asset fund (PHK, PAXS), etc...and some high yield bond ETFs and JBBB CLO. It's not "stressful" per se much. Just study and asset allocation. A game. Would I like to make some extra $$ with the "gambling" percent of my portfolio I've specified - sure. But I've reduced this to now just <1% in equities. If in theory if I missed everything and the market screamed higher the next month or two. or three..I wouldn't lose sleep over that. Don't try to time the absolute top nor bottom. It's just reward-risk analysis. .I do see a good opportunity to buy low - coming soon?
JAAA JBBB BIL in equal parts if you want “safe” average 6%
Increased my AMLP holdings and added JBBB today.
Mix some JAAA and JBBB. Reasonably safe and 6+ %.
Sure. I've been monitoring new issues on Fidelity's site for a couple of years. They are callable, and I've got issues with call dates between '25-'28. It's a bit like a ladder, only I'm fine holding til maturity at those rates. Even today, there are 6-6.5% new issues with A to BBB ratings. For funds, look at JPIE or JAAA, and don't reject high yield funds like SPHY or JBBB. There are many others.
I have a variety of individual corporate bonds with coupon between 6-6.7%. Also tickers SPHY, JBBB, JAAA, JEPI, JEPQ, SPYI, PFFA. Cash is in FZDXX money market fund.
your comparison off your comparing Bank Loans to Equity CLO's you need to be using DEBT Clo's like PAAA or CLOZ or JAAA or JBBB to BKLN and SRLN(or FLRT or FLBL)
As an alternative, I suggest that you research JAAA, JBBB, and CLOZ. I hold JBBB and CLOZ. JAAA is lower risk and hence lower return.
Big shift, in my view. Fundamental positioning by the Fed towards anti-inflationary policy. At most a 0.5% reduction in rates across all of 2025. Long term Treasuries at 4.5%. And I expect that to hold for some time. I cleared completely out of REITs. Took Utilities profits and a lot of dividend ETF profits. Loaded up on CLOZ, JBBB, and bought more MAIN. Bad news for small cap and mid cap.
What is your goal for this money, and what is your goal for the bonds? VGLT is my favorite long term, SGOV is my favorite short term, VCIT is my favorite general corporate, ICVT is my favorite tilted corporate, and JBBB is my favorite corporate adjacent. I believe they're all good, but they have wildly different purposes depending on what level of return you're looking for within what timeframe.
OXLC and ECC are CEFs that use leverage on top of CLOs. There are now CLO ETFs, which may not be mentioned in income factory. JAAA, JBBB, CLOI and CLOZ. Without the leverage the pure CLO ETFs are less volatile than the CEFs and also Senior loan ETFs like BKLN and SRLN,
Maybe look at JAAA and JBBB. Pretty stable 6+% closed end funds. I’ve been reinvesting all my cd interest into them and reinvesting monthly divs. Not much growth though.
I use a combo of mainly SWVXX and to a lesser extent JBBB to hold cash, as I use other ETF's and such for investment/growth. I had some JEPI for awhile, but the math didn't math for me (when taking into account risk), at least for cash/savings holdings.
Most stocks paying a consistent, qualified dividend are only going to return ~3%. Anything higher is usually either inconsistent, nonqualified, or bleeding share price. You would probably be better off just selling a portion of your long term gains in your existing portfolio, VTI, or BRKB. I've done the same exercise, and, at least in a taxable account, the answer is usually to just hold an index for a year and sell long-term gains. Now, if we're talking non-taxable, then you might as well go for the non-qualified income funds like JEPI covered call fund or a CLO fund like JBBB.
You could always do slightly higher risk for better monthly income. JAAA, JBBB, JEPI, JEPQ, etc.
JBBB has returned 1.4% since July and HYG -2.46%. They have similar yields, but HYG has more interest rate sensitivity and its share price significantly more volatile. I will probably switch to HYG at some point, but not until it's clear where yields are headed.
SGOV or USFR for a bearish position. JBBB or BKLN for a bullish position. The latest fixed 1.3% ibond is conticing too for an emergency fund. I don't like long duration bonds. Yes, a recession would cause yields to fall and bond prices to rise, but 1) the Fed isn't even considering cuts yet, so it's too early 2) Soft landing or inflation ticking back up are still possible, so it's too risky and 3) if you want to make money in the event of a recession, having a position in SGOV and purchasing equities when the market crashes is both safer and more lucrative.
> That's what I was thinking too, I was just looking for a more aggressive strategy than Tbill and chill. You could invest in floating-rate corporate debt. JAAA, JBBB, BKLN, FLRT, FTSL, etc.
Take a look at JBBB. Fixed income product from Janus Handrerson that buys BBB rated CLO tranches. Yield is currently around 7.5%. If you're more risk averse, they have a AAA sleeve under the ticker JAAA.