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GraniteShares HIPS US High Income ETF continues to underperform a simple equal-weight blend of four ETFs targeting the same "pass through" asset categories. Long-term asset erosion and high return of capital raise distribution sustainability concerns, despite a stable monthly payout and recent sideways price action. Low AUM, weak liquidity, and ongoing underperformance make HIPS less attractive than constructing a custom blend of pass through category ETFs or considering active bond alternatives.
The closed-end fund landscape may be seeing a big change as regulations may be shifting at the SEC, per recent announcements.
In a recent educational webcast, Rewriting the Income Playbook Kirsten Chang, senior industry analyst at VettaFi, joined GraniteShares founder and CEO Will Rhind and product specialist Matt Lamb to explore how autocallable ETFs are reshaping the income investing landscape. Key Takeaways Core fixed income is failing to meet client retirement needs.
In today's market, income investors remain firmly focused on one objective: yield. With traditional sources of income still under pressure, demand for high-income ETFs continues to grow — especially those capable of delivering consistent monthly payouts.
Income-focused investors have had plenty of factors to keep in consideration as of late. The latest CPI report showed that consumer prices rose at an annual rate of 2.6% in December, which was actually 0.1% lower than expectations.
GraniteShares HIPS US High Income ETF receives a renewed "Sell" rating due to persistent underperformance and structural capital erosion. HIPS invests equally in CEFs, BDCs, REITs, and MLPs, all categories suffering long-term capital decay despite high yields. Since the 2023 index change, HIPS underperformance relative to a benchmark got worse.
Investors are increasingly looking beyond traditional stocks and bonds to meet their income goals. One fund drawing attention for its generous yield is the GraniteShares HIPS US High Income ETF (HIPS).
GraniteShares HIPS US High Income ETF offers high yield via diversified exposure to REITs, CEFs, MLPs, and BDCs. HIPS's 11.2% yield is attractive, but persistent NAV erosion and underperformance versus alternatives raise concerns about long-term capital preservation. The fund pays out more than it earns, relying on past strong years, making future dividend sustainability questionable without a distribution cut.