There are tens of thousands of stocks, ETFs, and mutual funds available in the US. Whatever your investing goals might be, there are plenty of options to meet them. Income generation is no exception.

I believe we should get paid on our investments. And we should get paid more when we take on more risk. For Bedrock Income holdings, my minimum yield is 3.5%. These are typically boring, wealth-building businesses we can set-and-forget for decades to come.

For Current Yield positions, I tend to target yields above 5%. Yield Shark readers are also banking double-digit yields on several holdings.

Filtering for minimum yields considerably shrinks the universe of prospects. But yield depends on the dividend amount and the share price. So, stocks are constantly moving on and off of my investment “potentials” list.

Once a month, I run multiple stock screeners from several data providers and share the findings with my readers. My experience and bias are a subjective filter that all recommendations must pass, which is why I love it when you all write in to ask me about ideas you’re looking into as well.

That’s what we have today—stocks from the reader mailbag. So, I’ll jump into them in no particular order.

Remember, a great place to reach out to me is our online community. Plus, you’ll also get to engage with other members.

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BlackRock New York Municipal Income Trust (BNY)

When you’re considering a trust or a fund, you want to look at its objective and its top holdings. The objective should make sense to you,  and the top holdings should align with the objective.

Funds might also hold some hedging positions. But too many hedges in the top 10 holdings—or multiple companies that don’t fit into the fund’s objective—might be a red flag. We’ll also want to check what the fund’s expense ratio, aka, the amount of your investment taken to cover the fund’s expenses.

BNY invests in New York municipal bonds (munis) and offers tax-exempt income to investors. At least 80% of the fund’s assets are in investment grade munis. It currently holds positions in 241 munis and pays out $0.051 every month.

Here are the top holdings:

Source: New York Municipal Income Trust | BNY

True to its objective, all but one is a New York bond. Also notice that the bond expirations are far out. Unless the issuer goes bankrupt or disappears, the trust and its shareholders can expect to get paid for decades. Municipal bonds are considered much safer than corporates and generally have lower pay outs. However, BNY’s bond mix pays investors a 6.3% yield.

Finally, the expense ratio is 3.4%, which is higher than I would like. But at the end of the day, if you’re happy with the portfolio and the yield, it’s not worth worrying about. Just understand that the funds expenses are paid before you get paid.

Remember that part of this trust’s goal is to offer investors tax-advantaged income. This applies at the federal, New York state, and New York city levels, meaning investors residing in New York will benefit the most.

Eldridge AAA CLO ETF (CLOX), and Eldridge BBB-B CLO ETF (CLOZ)

These ETFs are both managed by asset management and insurance company Eldridge. The company currently has over $70 billion in assets under management.

Both funds are focused on collateralized loan obligations (CLOs). These are investments that pool loans into a single security. CLOs are credit rated so investors know the quality of the underlying loans.

CLOX aims for consistent return income by investing in a diverse portfolio of CLOs with an AAA rating (the highest quality). The fund pays out monthly and the amount varies based on the success of the portfolio. The current trailing twelve-month yield is 5.8%. Let’s check the top holdings:

Source: Eldridge AAA CLO ETF (CLOX) (Click to enlarge)

The holdings look in line with the fund’s objective. And looking at their yields, it seems that most of that income is passed on to shareholders. The expense ratio is just 0.2%. CLOZ is essentially the same, but it invests in CLOs with ratings between BBB+ and B-. It’s trailing twelve-month yield is 8.5% and a 0.5% expense ratio.

I’m not a huge fan of funds or pools of investments. The funds are designed to mitigate risk, but it also limits the potential upside. However, I do like funds that open the door to hard-to-access investments, and that is the case here.

Buyers must deal with certain hurdles when investing in municipal bonds or CLOs. These three funds make it as simple as trading a stock. And if you view them as income generators, you shouldn’t be weary of the potential loss of upside.

Personally, CLOs and munis don’t grab my attention. I do, however, think the payouts from these three funds will be safe and reliable for many years to come.

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For more income, now and in the future,

Kelly Green

• BNY
• CLO funds
• CLOX
• CLOZ
• Muni bond funds