Nuveen's Saira Malik says these are her top three income ideas right now
The Nuveen CIO, who leads a business with $1.4 trillion in assets, explains why she favors these assets within fixed income.
TL;DR
- High-yield municipal bonds offer attractive tax-equivalent yields nearing 10% and good diversification benefits.
- Bank loans, with floating interest rates tied to SOFR, provide a hedge against inflation and yield around 8% for up to three years.
- Preferred securities offer yields above 6% and are generally taxed as qualified dividends, providing a tax advantage over bond interest.
- The strength of the U.S. economy supports solid fundamentals for municipal bonds.
- Bank loans are suitable for navigating inflation uncertainty and offer low correlation to other asset classes.
- Preferred securities are dominated by financial companies, which Malik favors due to lower regulations and higher liquidity.