Dec 2 (Reuters) – With the Federal Reserve keeping rates
low and casting a cautious eye on Europe, is there still a way
for investors to achieve higher yields?
There are many options — from municipals to A-rated
corporate bonds to emerging market bonds. Sometimes funds that
are at opposite ends of the risk spectrum can add to your
portfolio diversification while boosting yield. Two often
overlooked choices are, Ginnie Maes and high-yield corporate
While they’re dissimilar when it comes to default risk,
they could both be paired up in a diversified income portfolio
to achieve returns above U.S. Treasuries and money-market
Ginnie Maes are mortgage-backed securities — but not the
kind that plummeted in value during the 2008 meltdown. That’s
because they are backed by the Government National Mortgage
Association, a full-fledged U.S. agency that has the full faith
and credit of the U.S. government.
They provide an even safer yield than the securities issued
by Freddie Mac and Fannie Mae, which have an implied guarantee
from the government, but are part of agencies that were
publicly-traded prior to their takeover by the government
during the housing collapse.