High Yields From High-Rate Lenders

Investors seeking out high yields can find them in high-rate lenders, non-bank lenders and a few financial REITs.

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A likely peak in inflation, along with interest rates that are thereby also at or near their apex, stands to revitalize the long-running global search for high yields. 

That should mean more demand for high-yielding credit securities, which include business development companies, or BDCs (typically high-rate lenders to small or midsize firms, with similar tax advantages to those of real estate investment trusts), nonbank lenders, and a few financial REITs. If 5% is the new 1% in the broad bond market, then it is not far-fetched to proclaim 8% the new 5% for these securities. 

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Jeffrey R. Kosnett
Senior Editor, Kiplinger's Personal Finance
Kosnett is the editor of Kiplinger's Investing for Income and writes the "Cash in Hand" column for Kiplinger's Personal Finance. He is an income-investing expert who covers bonds, real estate investment trusts, oil and gas income deals, dividend stocks and anything else that pays interest and dividends. He joined Kiplinger in 1981 after six years in newspapers, including the Baltimore Sun. He is a 1976 journalism graduate from the Medill School at Northwestern University and completed an executive program at the Carnegie-Mellon University business school in 1978.