I’m Using These 2 ETFs Instead of Counting On Social Security, And You Should Too

Retirees have faced some grueling times over the past several years. The double-digit inflation wrought by Bidenomics forced many to sell growth assets just to have cash to make ends meet. Shrinking buying power minimized income based investments’ coverage to just basic necessities, and often falling short of even that level.

But there are options, and two ETFs (Alerian MLP ETF (NYSE: AMLP) and the Vanguard International High Dividend Yield Index Fund ETF Shares (NASDAQ: VYMI) are portoflio cornerstones that can help retirees do better than if they just relied on Social Security alone. 

The economic recovery that the Trump administration is engineering has brought inflation down significantly. The US government is identifying and eliminating rampant waste, fraud and abuse of taxpayer money, domestic business is weaning itself off of foreign dependence, and the overall economic climate is positive.  While that is all good news, investors still face looming threats to the solvency of Social Security and the rebuilding of their portfolios. 

As inflation has been cut so drastically, Treasury Secretary Scott Bessent and numerous other economists anticipate another Fed rate cut. As such, interest-rate based income investments will likely see their prices go up and yields fall. Additionally, while the S&P 500’s bull run still seems strongly holding its trajectory, it is clearly overweighted by the AI focused “Magnificent 7” stocks – and if concerns of an AI bubble are even partially true, may be in for a sizable correction.

Investors seeking a non-interest rate income investment and a growth investment with limited AI downside exposure might wish to consider the following ETFs:

• Alerian MLP ETF (NYSE: AMLP)
• Vanguard International High Dividend Yield Index Fund ETF Shares (NASDAQ: VYMI)

Alerian MLP ETF

Midstream companies are essential for transmitting hydrocarbon products both to and from refineries and other locations.

If oil and gas are the lifeblood of our domestic energy system, then the midstream industry could be likened to its circulatory system. In the same way that the veins and circulatory system of the human body transports blood to all of its vital organs, the midstream sector provides the pipelines, maritime shipping, and inland trucking to deliver oil and gas hydrocarbon product to storage facilities, refineries, processing centers for freezing, and to warehouses and retail outlets. Publicly traded midstream companies are often organized as Master Limited Partnerships (MLP) and are required to remit 90% of their profits back to shareholders in exchange for access to the capital markets. 

The Alerian MLP ETF is a passively managed ETF that tracks the Alerian MLP Infrastructure Index. Launched on 8-24-2010, it holds a portfolio of some of the largest market-cap weighted publicly traded MLPs operating in North America. Oil and gas are now back in favor due to the mammoth escalation of power demanded from AI and their data centers and the unreliability of green energy wind and solar sources. As such, the profits from midstream companies are on the rise, meaning strong dividend distributions for the future. AMLP already sports an 8.24% yield, which will likely increase accordingly. An overview of AMLP appears below:

The top 5 holdings in AMPL are:

• MPLX – 13.06%
• Western Midstream Partners – 12.18%
• Enterprise Products Partners – 12.17%
• Plains All-American Pipeline – 12.05%
• Sunoco LP – 11.66%

Vanguard International High Dividend Yield Index Fund ETF Shares

HSBC is the largest stock position help by VYMI at 1.54%.

One of the unique things about the US market is that it is so large, rival public companies who might vie for market share often wind up stifling each other’s growth prospects. Perhaps because Europe and Asia have fewer global companies, those companies in their respective sectors face less competition and can dominate in their respective industrial sectors. ; 

Vanguard International High Dividend Yield Index Fund ETF Shares is an ETF that tracks the FTSE All-World ex US High Dividend Yield Index. Many of the top 10 names in its portfolio are household names in the US despite their international pedigrees – but none of them possess any significant AI exposure. Despite this, VYMI is outperforming the S&P 500’s 16% return with its own YTD return of 33.78%.  With an inception date of 2-25-2016, Vanguard also handles all foreign exchange conversion in-house. A view of VYMI is below as follows:

The top five largest positions in VYMI are:

• HSBC plc – 1.54%
• Nestle S.A. – 1.53%
• Novartis AG – 1.46%
• Roche Holding AG – 1.44%
• Shell plc – 1.39%