Finding yield in alternative sources

Sources: Bloomberg, Cliffwater, FactSet, and Wells Fargo Investment Institute, as of March 31, 2022. Direct lending yield is as of December 31, 2021. For illustrative purposes only. BDC = Business Development Companies. Direct lending: Cliffwater Direct Lending Index; BDC: Cliffwater BDC Index; Emerging market high yield: Bloomberg Emerging Markets High Yield; U.S. high yield: Bloomberg U.S. Corporate High Yield; Leveraged loans: S&P/LSTA U.S. Leveraged Loan 100 Index; Global infrastructure: MSCI World Infrastructure Index; Global public real estate: FTSE NAREIT Equity REITs Index; International equity: MSCI All Country World ex-U.S. Index; Securitized assets: Bloomberg U.S. Securitized: MBS/ABS/CMBS; U.S investment grade: Bloomberg U.S. Aggregate Bond Index; U.S. equity: MSCI USA Index; Global convertible bonds: Bloomberg Global Convertibles Composite Index. Yields represent past performance and fluctuate with market conditions. Current yields may be higher or lower than those quoted above. An index is unmanaged and not available for direct investment. Past performance is no guarantee of future results. See “Index Definitions and Asset Class Risk Disclosures” link above for index definitions.

Investing in stocks involves risk and their returns and risk levels can vary depending on prevailing market and economic conditions. REITS have special risks, including the possible illiquidity of the underlying properties, credit risk, interest rate fluctuations, and the impact of varied economic conditions.

Key Takeaways

  • Alternative investments can be a source of income for investors while interest rates are low.
  • We currently have a favorable view on Direct Lending strategies and business development companies (or BDCs).