Tap Income ETFs Amid Trump Tariffs' Legal Trouble

Yahoo

3 days ago

U.S. stocks remained volatile as investors processed a renewed wave of tariff uncertainty. The turbulence followed a decision by a federal appeals court on May 29 to temporarily reinstate former President Trump's global tariffs.
This move came just a day after a trade court had deemed many of the tariffs illegal. The temporary pause allows the appeals court time to fully review the case. The Trump administration is required to submit its legal briefings by June 9.
In response to the appeals court's decision, the White House indicated it is ready to take the matter to the Supreme Court if necessary. Officials also mentioned exploring alternative ways to enforce the tariffs without depending on emergency powers.
Despite the tariff uncertainty, there were some bright spots for investors during the week. Early signs of progress toward a U.S.-EU trade agreement helped buoy sentiment. Additionally, chipmaker NVIDIA's earnings report on May 28 drew significant market attention, offering insights into the tech sector's continued strength.
Buying income-focused exchange traded funds (ETFs) amid the current economic and market uncertainty—especially related to tariffs, inflation, and potential legal battles—can be an intriguing move.
Income ETFs typically focus on dividend-paying stocks, bonds, or a mix of income-generating assets. During times of market volatility, these products ensure regular source of current income.
If capital appreciation is hard to come by, income ETFs allow investors to still generate a total return through dividends or bond coupon payments—even when stock prices stagnate or fall.
Global tariffs may impact specific industries (e.g., manufacturing, tech) more than others. Income ETFs, especially those with diversified holdings across sectors, asset classes and geographies, help spread risk.
During uncertain periods like tariff disputes or pending court rulings, high-growth stocks can be particularly volatile. Income ETFs, by contrast, generally exhibit lower volatility. Against this backdrop, below we highlight a few income ETFs.
SPDR S&P 500 ETF Trust SPY is up 0.9% so far this year (as of May 29, 2025). The ETF yields 1.22% annually and charges 9 bps in fees. In comparison, the following income ETFs have either outperformed SPY or experienced minimal losses year-to-date.
Amplify High Income ETF YYY – Yields 12.56% annually
The underlying ISE High Income Index is comprised of 30 closed-end funds ranked highest overall by the ISE in three criteria: fund yield, discount to net asset value and liquidity. The ETF is down 1.6% so far this year. The expense ratio of the ETF is 3.56% annually.
STF Tactical Growth & Income ETF TUGN – Yields 12.56% annually
The ETF is a simple, rules-based approach to tactical asset allocation with monthly income. The tactical asset allocation engine of TUG is used to set the exposure to equities and fixed income while an active managed options strategy provides an additional income component. The fund charges 65 bps in fees. The fund is off 2.5% year-to-date.
Global X Alternative Income ETF ALTY – Yields 8.21% annually
The underlying Indxx SuperDividend Alternatives Index tracks the performance of among the highest dividend yielding securities in each category of alternative investments, as defined by the Index Sponsor. The fund charges 50 bps in fees. The fund is off 2.05% year to date.
Arrow Dow Jones Global Yield ETF GYLD – Yields 11.93% annually
The underlying Dow Jones Global Composite Yield Index seeks to identify the 150 highest yielding investable securities in the world within Equity, Sovereign Debt, Corporate Debt, Real estate & Global Alternatives. The fund charges 75 bps in fees. The fund is up 5.5% year to date.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
SPDR S&P 500 ETF (SPY): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).
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