Investing
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ETFs have grown into a dominant investment vehicle due to their intraday liquidity, with income-focused investors increasingly turning to high-yield names like PFLT, SCM, EFC, DX, and HRZN—each yielding over 9%.
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These ETFs often hold floating-rate debt or business development company (BDC) investments, which offer high yields but carry elevated risk tied to credit quality and market volatility.
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Their appeal spans both long-term income investors and short-term traders, as their daily price action enables tactical entry and exit strategies around dividend events and market swings.
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Transcript:
[00:00:04] Doug McIntyre: One of the things that we don’t talk about often enough, because it’s a huge part of the investment marketing is ETFs. What? Oh my goodness, yes, sure. If you were to look at ETFs today. Where does that stand in the pantheon of investments?
[00:00:17] Lee Jackson: Well, I think 10 years ago they, weren’t even that well known. And now the ETF, which stands for Exchange Traded Fund, and there’s a, we’ve talked about this with our viewers and we’ve written about it for years. The advantage to owning them is if it’s 2 0 7 and you need to sell it, you can get on and sell it right away.
[00:00:37] Lee Jackson: You don’t have to wait to the end of the day pricing. Like you get on a open end mutual fund. They take the NAB, and that’s what your end of the day pricing is. And that’s not the case with exchange traded funds. So that’s why they’ve become so popular. And one of the things we’d like to focus on here at 24/7 is some of the higher yielding ones.
[00:00:59] Lee Jackson: And we recently had an article. And it was five quality ETFs that yield more than 9%. And, we’re the first to say to everybody getting higher yield usually means higher risk. there, there’s no question about it. You want safe risk, you can go to, money market bank funds and they’ll pay you 4% or what, So, and that’s insured by FDIC up to 250 grand. But we found five, one of our writers found five separate funds. And I’m gonna give, I’m gonna give them slowly, and I’m gonna give you the symbols,
[00:01:32] Doug McIntyre: but all of
[00:01:32] Lee Jackson: these funds, yield more than 9%. One of ’em is Pennant Park Floating Rate Capital (NYSE: PFLT). another one is Stellus Capital Investment Corporation (NYSE: SCM). They, run their own book. But again, the whole focus is growth and income. Ellington Financial (NYSE: EFC) is another one. The symbol there is EFC. They’re a real estate trust, they deal in, in mortgage, paper, that kind of thing. Managed or multi-housing, paper, things of that nature.
[00:02:09] Lee Jackson: Dynex Capital (NYSE: DX), which is another company that focuses on the tech angle. and trades that paper too. And lastly, Horizon Technology Finance Corporation (NASDAQ: HRZN), which is a company that backs a lot of smaller tech. And again, these are companies that, especially if they’re a BDC or a business development, they’re putting 10, $15 million into smaller companies.
[00:02:33] Lee Jackson: And they’re, but you know, and often it’s floating rate paper and often, these people need the money, so they’ll pay 10, 11, 12%. On these, so there’s five funds that we like. The symbols again are PFLT, SCM, EFC, DX, and HRZN. And, I own some myself. I don’t own any of these, but I own Trinity Capital (NASDAQ: TRIN).
[00:03:02] Lee Jackson: They’re kind of a BDC, and it yields, 14%. It’s ridiculous. And, for, those who have a higher risk tolerance and those who want more passive income, Doug, this is the place to be.
[00:03:15] Doug McIntyre: Well, it’s interesting because it’s a passive income day trader, and there’s, you could take this and say, I’m just gonna buy this and hold it for passive income.
[00:03:26] Doug McIntyre: But also if you think about the fact that day traders want something they can sell throughout the day. Absolutely. These are tradable. And that’s one of the characteristics of that love. People love ETFs because. They can move in and outta them. Right?
[00:03:40] Lee Jackson: And often cases they will move up and down. They’ll move up and down in front.
[00:03:45] Lee Jackson: Like for instance, some of them, like the BDCs, like, FSK, as it gets closer to the, X date, the stock often will trade up. And so some traders, they don’t care about that dividend. They just care about if the stock’s gonna move, 7%, like it always does or something of that nature. So yeah, that is the huge advantage, and especially if it’s a day where it’s beneficial to you, and then the market, sells off at the close.
[00:04:14] Lee Jackson: We, you, don’t get the high point during the day, you get the closing print. So, yeah,I think it’s only gonna continue to grow. And the industry’s just massive. There’s, a ton of people in it
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