Editorial StaffFunds to Buy: Amplify High Income ETF (YYY)
52-Week Range: $14.26 – $17.82 Distribution Yield: 8.9% Expense Ratio: 2.45%, or $245 per $10,000 invested annually
The Amplify High Income ETF provides diversification by investing in closed-end funds (CEFs) — other publicly traded investment companies. InvestorPlace.com readers should note that because YYY is a fund of funds, its total expense ratio is high. The fund began trading in June 2013, and net assets stand at $489.9 million. YYY, which has 45 holdings, tracks the ISE High Income Index. The current allocation is 70% fixed income and 30% equities. In terms of asset classes in YYY, high-yield bond funds make up the highest slice, with 21.7%, followed by loan participation funds (20.49%) and multi-sector bond funds (8.62%). Upon closer inspection, we note that a large slice of assets are within the high credit risk range. In other words, they carry high bankruptcy risk. The fund’s leading 10 holdings account for about 30% of YYY.
Several of the leading CEFs in the roster include:
PIMCO Corporate & Income Opportunity (NYSE:PTY)
Oxford Lane Capital Corp (NASDAQ:OXLC)
PIMCO Dynamic Income Fund (NYSE:PDI)
Liberty All Star Equity Closed Fund (NYSE:USA). YTD, the fund has been up about 9.3%, and saw a multi-year high in June. For many investors, YYY could offer diversification. However, potential investors should remember the high expense ratio as well as the high level of exposure to high-yielding assets.
