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Looking For Income

June 2025
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Potential Benefits of Diversifying Income Portfolios

With treasuries, corporate bonds, and bank products yields low, and with the expectation that the Federal Reserve Board will start cutting rates further, the tools investors used in the past to generate income may no longer be effective.

The History of Treasury Yields

(January 1, 1962 – June 30, 2025)
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Annual Income Over Time

In analyzing the income generated by certain income-oriented strategies over time, we can see the effect of the current low-yielding market. The graph below illustrates the historical annual income from a hypothetical $100,000 bond investment at various points in time.

Chart: Annual Income Over Time

Beyond the Bond

Pass-through securities have become more attractive as investors focus on income-oriented investments. The current yields in these sectors are significantly higher than those of traditional investments such as stocks and bonds, and we believe they can provide a dynamic complement to an income portfolio.

Income Sector Yields vs. Traditional Investments

(Last twelve months as of 6/30/25)

Chart: Income Sector Yields vs. Traditional Investments

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