High Yield ETFs as “Insurance” for Your Income Business
One of the biggest mindset shifts in income investing is this:
Stop thinking like a stock picker.
Start thinking like a business owner.
A real business never relies on one machine to generate all of its revenue. If you owned a construction company and had only one excavator, your business would be incredibly fragile. If that machine breaks, revenue stops.
Smart owners spread their income across multiple pieces of equipment that perform differently in different environments.
Your income portfolio should work the exact same way.
Today I want to talk about a group of high-yield ETFs that can act like insurance policies for your income equipment.
The goal here is not to chase yield.
The goal is to protect your income across different economic environments.
Why “Income Insurance” Matters
Markets move in cycles:
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Sometimes stocks lead
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Sometimes real estate leads
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Sometimes credit leads
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Sometimes gold leads
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Sometimes nothing works except defensive strategies
If your income depends on one asset class, your “business” becomes fragile.
But if your income comes from multiple sources that behave differently, your income becomes far more resilient.
This is where a diversified set of high-yield ETFs can shine.
Let’s walk through the “equipment lineup.”
KHPI — Hedging & Volatility Income
KHPI has a low best, Yields 9% and will protect your portfolio when everything is going down. This will help preserve your margin of safety while still generating income.
Funds like this use options and hedging strategies to generate income, especially during volatile markets.
When markets get messy and unpredictable, this type of strategy can help stabilize the overall portfolio.
In business terms:
This is the backup generator that keeps the lights on when the power goes out.
JEPI — Low-Beta Equity Income
Low-beta equity income fund aims to create stability in up or down markets, and yields 6% to 7%
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Generate income
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Reduce volatility compared to the broad market
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Smooth the ride during downturns
This fund still participate in equity markets, but with a more conservative income-focused approach.
In our business analogy:
This is your reliable everyday work truck — not flashy, but consistently productive.
PBDC — Business Development Companies (Private Lending)
BDCs lend money to middle-market companies and has a 10% yield.
This gives you exposure to:
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Private credit
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Floating-rate lending
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The real economy
BDCs often perform well in higher interest-rate environments because the loans they issue frequently have floating rates.
This adds a powerful diversification layer beyond traditional stocks.
In business terms:
You’re now acting like the bank that finances other businesses.
IYRI — Real Estate Income (REIT Exposure)
Real estate behaves differently than stocks and bonds with an 11% yield.
REIT income tends to be influenced by:
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Rent growth
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Property values
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Inflation
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Long-term economic expansion
Adding real estate helps balance interest-rate cycles and adds another independent income stream.
This is like owning the land and buildings your business operates from.
IAUI — Gold as a Portfolio Stabilizer
Gold isn’t an income asset — but it is a powerful stabilizer this fund designed to be less volatile than gold prices adding extra safety with an 11% yield.
Historically, gold has helped portfolios during:
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Inflation spikes
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Currency stress
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Market panics
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Geopolitical uncertainty
Gold acts as storm insurance for your portfolio.
It’s the asset you hope you don’t need… until you really need it.
AAA CLO Exposure (JAAA) — Senior Secured Corporate Loans
Collateralized Loan Obligations (CLOs) sound complicated, but the concept is simple and yields 5% to 6%.
AAA CLO tranches:
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Sit at the top of the capital structure
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Are backed by diversified pools of corporate loans
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Have historically experienced extremely low default rates
They are designed to be one of the most defensive layers of the corporate credit world.
Important:
AAA CLO tranches have historically had extremely low default rates!
Think of this as owning the safest slice of a very large loan portfolio.
Putting It All Together
When you combine these income sources, something powerful happens.
You are no longer dependent on:
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One market
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One sector
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One economic environment
Instead, you’ve built a portfolio designed to generate income from:
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Options strategies
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Equity markets
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Private lending
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Real estate
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Hard assets
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Corporate credit
That’s what real businesses do.
They don’t rely on one machine.
They build a fleet.
Final Thought
High yield investing isn’t about chasing the biggest number you can find.
It’s about building a resilient income machine that can keep producing cash flow across bull markets, bear markets, recessions, and recoveries.
That’s what real income investing looks like when you think like a business owner.
Disclaimer
The information provided is for educational and entertainment purposes only and should not be considered financial, investment, or trading advice. I am not a licensed financial advisor. All investing involves risk, including the potential loss of principal. Always do your own research and consult a qualified financial professional before making any financial decisions.
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