Treasuries Pay 4 Percent. These 3 ETFs Pay Nearly Double and You Can Sell Them Any Day You Want.

With the 1-year Treasury yielding about 4% and the 6-month bill just under 4%, income investors face a familiar dilemma. Lock money up in a CD or an individual bond and you know your coupon, but you give up flexibility. Reach for higher yield in credit, and you take on default risk. The three ETFs in this piece, SPDR Bloomberg Short Term High Yield Bond ETF (NYSEARCA:SJNK), VanEck Fallen Angel High Yield Bond ETF (NASDAQ:ANGL), and Invesco Variable Rate Preferred ETF (NYSEARCA:VRP), each throw off distribution income in the neighborhood of double the short Treasury benchmark while trading on major exchanges any minute the market is open.

That liquidity is the secondary hook. A five-year Treasury or a bank CD punishes you for exiting early. These funds settle in two days and price continuously. The tradeoff is real credit risk, which Treasuries do not carry.

SJNK: Short-Duration Junk With Less Rate Whiplash

SJNK holds high-yield corporate bonds that mature inside five years, tracking the Bloomberg US High Yield 350mn Cash Pay 0-5 Yr 2% Capped Index. That short maturity is the whole point. Standard junk-bond funds carry duration in the four-year range, which means a rate spike can carve a meaningful chunk out of principal. SJNK’s shorter profile absorbs less of that hit while still pocketing the credit spread over Treasuries.

The distribution stream reflects that structural yield. SJNK pays monthly, most recently $0.142085 per share for the August 3, 2026 ex-date, with a trailing 12-month total of $1.739275 against a recent price near $25. That puts the running yield firmly in the neighborhood of double the 1-year Treasury, and if the every-30-days cadence is the reason you are here, we rounded up seven other monthly payers in a free report.

The tradeoff is that short-dated junk is still junk. If the credit cycle turns and default rates climb, SJNK will bleed regardless of its shorter duration. It is the right tool for an investor who wants the high-yield coupon without accepting long-bond interest-rate risk. It is the wrong tool for anyone who thinks a recession is imminent and needs true safety.

ANGL: The Contrarian Bet on Downgraded Blue Chips

ANGL is the non-obvious pick here, and arguably the most interesting one. It buys only “fallen angels,” bonds that were originally issued at investment grade and later downgraded into junk territory. That single filter changes the character of the portfolio entirely.

Fallen angels tend to be large, established companies going through a rough patch, not speculative issuers that were never creditworthy to begin with. They typically skew heavily toward BB ratings, the highest tier of junk, and are often mechanically sold by investment-grade-only funds at the moment of downgrade, which creates a forced-seller discount that patient buyers can harvest. As a result, the fallen-angel segment has historically outperformed the broad high-yield market with lower default losses.

The current portfolio bears this out. ANGL’s holdings read like a downgraded blue-chip roster, with meaningful positions in Nissan Motor, Vodafone Group, Celanese, Paramount Global, Vornado Realty, and Whirlpool. These are names most investors recognize, not obscure leveraged buyouts. The fund manages roughly $3.07 billion in net assets as of the April 30, 2026 filing.

And ANGL pays monthly. Recent distributions have been $0.1684 for August and $0.171 for July, and the annualized forward distribution sits at $2.0208 against a current share price near $29. That comfortably clears the “nearly double a 4% Treasury” bar. Total return has led the group, with the fund up about 5% over the past year.

ANGL owns longer-duration paper than SJNK because fallen angels are typically issued with 10-year-plus maturities. That means more price sensitivity if long yields keep climbing, and the 30-year Treasury already sits above 5%. Investors get a higher-quality junk portfolio, but they take duration in exchange.

VRP: Preferreds With a Floating-Rate Twist

VRP is the wildcard here because it holds variable-rate and floating-rate preferred securities rather than bonds, most of them issued by banks and financial firms. Preferreds sit above common stock but below senior debt in the capital structure, which is why they offer equity-like yields. The variable-rate coupon is the key feature: when short rates stay high, coupons reset upward and duration risk stays contained.

That mechanism cuts both ways though. Distributions have compressed as short rates have drifted lower. The latest monthly payment was $0.08992, down from around $0.10 earlier in 2026. On a trailing 12-month basis, VRP paid $1.38356 against a share price near $24, which still puts realized yield well above the 1-year Treasury, though the annualized forward figure of $1.07904 hints at a lower run rate going forward.

Concentration in bank preferreds is the other consideration. If regional-bank stress returns or a large issuer runs into trouble, VRP will feel it more than a diversified corporate bond fund would. The fund has still delivered a nearly 2% year-to-date return and about 4% over the past year.

Which One Fits Your Situation

These three funds solve different problems.

Choose SJNK if your worry is interest-rate risk and you want the cleanest, shortest-duration way to earn a junk coupon. Its portfolio matures fast enough that you get paid to wait without betting on the shape of the yield curve.

Choose ANGL if you believe higher-quality junk is where the value lives, and you can tolerate more duration in exchange for a portfolio full of recognizable names that were downgraded rather than born speculative. Of the three, this is the one that has historically rewarded patient holders and remains underused relative to its track record.

Choose VRP if you want diversification away from corporate bonds and into preferred securities, with a floating-rate structure that hedges against a scenario where short rates stay stubbornly high. Just know you are taking financial-sector concentration and accepting that distributions will move with short rates in both directions.

Think of these funds as income substitutes rather than capital-preservation vehicles, appropriate only for the portion of a portfolio that can absorb credit and drawdown risk in exchange for a coupon closer to 7% than 4%.

Contact [email protected] for any questions or corrections.