Investments

stock dividend investing

Income Investing? Think Dividends

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Income Investing? Think Dividends

It used to be, investors seeking steady income turned exclusively to bonds, whose regular interest payments provided a dependable income source, especially for retirees. 

But times have changed. With many retirements today lasting 30 years or more, income investors need to make sure their savings keep pace with inflation and last a long time. This means investing in assets that provide current income, yet have the potential to grow in value and yield over time.

One widely used strategy is to include dividend-paying stocks in your portfolio. History provides compelling evidence of the long-term benefits of dividends and their reinvestment:

  • Dividends are a sign of corporate financial health. Dividend payouts are often seen as a sign of a company’s financial health and management’s confidence in future cash flow. Dividends also communicate a positive message to investors who perceive a long-term dividend as a sign of corporate maturity and strength.
  • Dividends are a key driver of total return. There are several factors that may contribute to the superior total return of dividend-paying stocks over the long term. One of them is dividend reinvestment. The longer the period during which dividends are reinvested, the greater the spread between price return and dividend reinvested total return.
  • Dividend payers offer potentially stronger returns, lower volatility. Dividends may help to mitigate portfolio losses when stock prices decline, and over long time horizons, stocks with a history of increasing their dividend each year have also produced higher returns with less risk than non-dividend-paying stocks. For instance, for the 10 years ended June 30, 2019, the S&P 500 Dividend Aristocrats — those stocks within the S&P 500 that have increased their dividends each year for the past 25 years — produced average annualized returns of 16.3% vs. 14.7% for the S&P 500 overall, with less volatility (11.7% vs. 12.7%, respectively).1
  • Dividends benefit from potentially favorable tax treatment. Most taxpayers are subject to a top federal tax rate of only 15% on qualified dividends, although certain high-income taxpayers may pay up to 23.8%. However, that is still lower than the current 37% top rate on ordinary income.
  • Dividend-paying stocks may help diversify an income-generating portfolio. Income-oriented investors may want to diversify potential sources of income within their portfolios.

Stocks with above-average dividend yields may compare favorably with bonds and may act as a buffer should conditions turn negative within the bond market.

 

Dividends Can Boost Total Return2

Income Investing? Think Dividends

If you are considering adding dividend-paying stocks to your investment mix, keep in mind that they generally carry higher risk than bonds. Stock investing involves the potential for loss of principal. Also, dividends can be increased, decreased, and/or eliminated at any time without prior notice. That’s why it’s important to choose your dividend-paying stocks carefully, since some companies may increase dividends to attract investors if their finances aren’t watertight or their outlook is cloudy.  

Your financial professional can help you determine if dividend-paying stocks are a good fit for your portfolio.

 

 

 

 

1Source: DST Systems, Inc., based on data from Standard & Poor’s. Volatility is measured by standard deviation. Standard deviation is a historical measure of the variability of returns relative to the average annual return. If a portfolio has a high standard deviation, its returns have been volatile. A low standard deviation indicates returns have been less volatile. Past performance is no guarantee of future results.

 

2Source: ChartSource®, DST Systems, Inc. For the period from January 1, 1989, through December 31, 2018. Stocks are represented by the S&P 500 index. Stock prices are represented by the change in price of the S&P 500 index. It is not possible to invest directly in an index. Index performance does not reflect the effects of investing costs and taxes. Actual results would vary from benchmarks and would likely have been lower. Past performance is not a guarantee of future results. © 2019, DST Systems, Inc. Reproduction in whole or in part prohibited, except by permission. All rights reserved. Not responsible for any errors or omissions. (CS000080)

 

Because of the possibility of human or mechanical error by DST Systems, Inc. or its sources, neither DST Systems, Inc. nor its sources guarantees the     accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. In no event shall DST Systems, Inc. be liable for any indirect, special or consequential damages in connection with subscriber’s or others’ use of the content.

 

© 2019 DST Systems, Inc. Reproduction in whole or in part prohibited, except by permission. All rights reserved. Not responsible for any errors or omissions. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.  This article was prepared by DST Systems Inc. This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor. Please consult me if you have any questions. LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.

tax efficient investing

Tax Efficient Investing

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Five Strategies for Tax Efficient Investing

As just about every investor knows, it’s not what your investments earn, but what they earn after taxes that counts. After factoring in federal income and capital gains taxes, the alternative minimum tax, and any applicable state and local taxes, your investments’ returns in any given year may be reduced by 40% or more.

For example, if you earned an average 8% rate of return annually on an investment taxed at 28%, your after-tax rate of return would be 5.76%. A $50,000 investment earning 8% annually would be worth $107,946 after 10 years; at 5.76%, it would be worth only $87,536. Reducing your tax liability is key to building the value of your assets, especially if you are in one of the higher income tax brackets. Here are five ways to potentially help lower your tax bill.1

Invest in Tax-Deferred and Tax-Free Accounts

Tax-deferred accounts include company-sponsored retirement savings accounts such as traditional 401(k) and 403(b) plans, traditional individual retirement accounts (IRAs), and annuities. Contributions to these accounts may be made on a pretax basis (i.e., the contributions may be tax deductible) or on an after-tax basis (i.e., the contributions are not tax deductible). More important, investment earnings compound tax deferred until withdrawal, typically in retirement, when you may be in a lower tax bracket. Contributions to non-qualified annuities, Roth IRAs, and Roth-style employer-sponsored savings plans are not tax deductible. Earnings that accumulate in Roth accounts can be withdrawn tax free if you have held the account for at least five years and meet the requirements for a qualified distribution.

Pitfalls to avoid: Withdrawals prior to age 59½ from a qualified retirement plan, IRA, Roth IRA, or annuity may be subject not only to ordinary income tax, but also to an additional 10% federal tax. In addition, early withdrawals from annuities may be subject to additional penalties charged by the issuing insurance company. Also, if you have significant investments, in addition to money you contribute to your retirement plans, consider your overall portfolio when deciding which investments to select for your tax-deferred accounts. If your effective tax rate — that is, the average percentage of income taxes you pay for the year — is higher than 15%, you’ll want to evaluate whether investments that earn most of their returns in the form of long-term capital gains might be better held outside of a tax-deferred account. That’s because withdrawals from tax-deferred accounts generally will be taxed at your ordinary income tax rate, which may be higher than your long-term capital gains tax rate (see “Income vs. Capital Gains”).

Income vs. Capital Gains

Generally, interest income is taxed as ordinary income in the year received and qualified dividends are taxed at a top rate of 20%. (Note that an additional 3.8% tax on investment income also may apply to both interest income and qualified (or nonqualified) dividends.) A capital gain (or loss) — the difference between the cost basis of a security and its current price — is not taxed until the gain or loss is realized. For individual stocks and bonds, you realize the gain or loss when the security is sold. However, with mutual funds you may have received taxable capital gains distributions on shares you own. Investments you (or the fund manager) have held 12 months or less are considered short term, and those capital gains are taxed at the same rates as ordinary income. For investments held more than 12 months (considered long term), those capital gains are taxed at no more than 20%, although an additional 3.8% tax on investment income may apply. The actual rate will depend on your tax bracket and how long you have owned the investment.

Consider Government and Municipal Bonds

Interest on U.S. government issues is subject to federal taxes but is exempt from state taxes. Municipal bond income is generally exempt from federal taxes, and municipal bonds issued in-state may be free of state and local taxes as well. An investor in the 33% federal income-tax bracket would have to earn 7.46% on a taxable bond, before state taxes, to equal the tax-exempt return of 5% offered by a municipal bond. Sold prior to maturity or bought through a bond fund, government and municipal bonds are subject to market fluctuations and may be worth less than the original cost upon redemption.

Pitfalls to avoid: If you live in a state with high state income tax rates, be sure to compare the true taxable-equivalent yield of government issues, corporate bonds, and in-state municipal issues. Many calculations of taxable-equivalent yield do not take into account the state tax exemption on government issues. Because interest income (but not capital gains) on municipal bonds is already exempt from federal taxes, there’s generally no need to keep them in tax-deferred accounts. Finally, income derived from certain types of municipal bond issues, known as private activity bonds, may be a tax-preference item subject to the federal alternative minimum tax.

Look for Tax-Efficient Investments

Tax-managed or tax-efficient investment accounts and mutual funds are managed in ways that may help reduce their taxable distributions. Investment managers may employ a combination of tactics, such as minimizing portfolio turnover, investing in stocks that do not pay dividends, and selectively selling stocks that have become less attractive at a loss to counterbalance taxable gains elsewhere in the portfolio. In years when returns on the broader market are flat or negative, investors tend to become more aware of capital gains generated by portfolio turnover, since the resulting tax liability can offset any gain or exacerbate a negative return on the investment.

Pitfalls to avoid: Taxes are an important consideration in selecting investments but should not be the primary concern. A portfolio manager must balance the tax consequences of selling a position that will generate a capital gain versus the relative market opportunity lost by holding a less-than-attractive investment. Some mutual funds that have low turnover also inherently carry an above-average level of undistributed capital gains. When you buy these shares, you effectively buy this undistributed tax liability.

Put Losses to Work

At times, you may be able to use losses in your investment portfolio to help offset realized gains. It’s a good idea to evaluate your holdings periodically to assess whether an investment still offers the long-term potential you anticipated when you purchased it. Your realized capital losses in a given tax year must first be used to offset realized capital gains. If you have “leftover” capital losses, you can offset up to $3,000 against ordinary income. Any remainder can be carried forward to offset gains or income in future years, subject to certain limitations.

Pitfalls to avoid: A few down periods don’t necessarily mean you should sell simply to realize a loss. Stocks in particular are long-term investments subject to ups and downs. However, if your outlook on an investment has changed, you may be able to use a loss to your advantage.

Keep Good Records

Keep records of purchases, sales, distributions, and dividend reinvestments so that you can properly calculate the basis of shares you own and choose the shares you sell in order to minimize your taxable gain or maximize your deductible loss.

Pitfalls to avoid: If you overlook mutual fund dividends and capital gains distributions that you have reinvested, you may accidentally pay the tax twice — once on the distribution and again on any capital gains (or underreported loss) — when you eventually sell the shares.

Keeping an eye on how taxes can affect your investments is one of the easiest ways you can enhance your returns over time. For more information about the tax aspects of investing, consult a qualified tax advisor.

 

 

 1Example does not include taxes or fees. This information is general in nature and is not meant as tax advice. Always consult a qualified tax advisor for information as to how taxes may affect your particular situation.

Securities offered through LPL Financial, Member of FINRA/SIPC and investment advice offered through Stratos Wealth Partners Ltd., a Registered Investment Advisor. Stratos Wealth Partners, Ltd. and Lob Planning Group are separate entities from LPL Financial.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.  Stratos Wealth Partners, Lob Planning Group and LPL Financial do not provide legal and/or tax advice or services. Please consult your legal and/or tax advisor regarding your specific situation.

Because of the possibility of human or mechanical error by DST Systems, Inc. or its sources, neither DST Systems, Inc. nor its sources guarantees the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. In no event shall DST Systems, Inc. be liable for any indirect, special or consequential damages in connection with subscriber’s or others’ use of the content.

© 2017 DST Systems, Inc. Reproduction in whole or in part prohibited, except by permission. All rights reserved. Not responsible for any errors or omissions.

Should I use a 529 plan to save for college?

Facts about 529 Plans

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Getting the Facts Straight about 529 Plans

As many of us are sending our children back to school this month, I thought it would be a good time to clear up some misconceptions about 529 savings plans. A 529 savings plan is an investment program offered by each state. It offers tax-free growth on money invested to pay for education expenses. Here are some common questions that arise regarding these savings plans:

Do I lose the money if my child doesn’t go to college? You will always have access access to the money in your 529 account. If withdrawn for anything other than qualified expenses, you will be subject to income taxes and a 10% penalty on the earnings. The account is funded with after-tax money, so the principal isn’t subject to taxes or the penalty. For example, let’s say you withdraw $10,000 from your plan and $8,000 is principal and $2,000 is earnings. If the money is used for anything other than an educational expense, $2000 is subject to taxes and penalty. If your child doesn’t need the money for education, you can also change the beneficiary to another family member or fund your own continuing education. There are no tax consequences or penalty to change the beneficiary.

What qualifies for an educational expense? A qualifying expense doesn’t have to be tuition or fees to a 4-year college. It could also be used for community college, graduate school, eligible vocational or trade schools, or adult continuing education classes. Funds can also be used for off campus housing, books and supplies, and computers. This year’s Tax Cuts and Jobs Act has expanded qualified expenses to distribute up to $10,000 per student to cover elementary or secondary schools.

What if my child gets a scholarship? You will be exempt from the 10% penalty on withdrawals up to the amount of the scholarship. You will still be subject to income taxes on the earnings. An exemption of the penalty is also applied if the beneficiary dies or becomes disabled, or decides to attend a U.S. Military Academy.

Do I have to use my home state’s plan or choose a school in my home state? You are not limited to using your home state’s plan, but there may be tax advantages. Some states offer a state tax deductions for 529 contributions if you make them to a plan in your home state. Your child can attend any eligible school regardless of where the plan is set up.

Will a 529 plan affect my child’s chances of receiving financial aid? Financial aid eligibility can vary depending on the institution, but it will have some impact. Since the account will be considered assets of the owner of the account and not the child, the impact will be small. An asset of a parent will reduce your eligibility by up to 5.64% of the value of the account. If the account were in the child’s name, it would be reduced by 20% of the value of the account. Also, the distributions will not be counted as income to your child for financial aid purposes.

With education expenses continuing to outpace inflation, a 529 plan can be a valuable tool to help cover the costs. A great resource for researching the different plans available is www.savingforcollege.com. If you are still unsure, reach out and I can help you determine the best way to save for your family’s education expenses.

 

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual, nor intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

 Securities offered through LPL Financial, Member of FINRA/SIPC and investment advice offered through Stratos Wealth Partners Ltd., a Registered Investment Advisor. Stratos Wealth Partners, Ltd. and Lob Planning Group are separate entities from LPL Financial.

Should I buy a variable annuity?

Should I Buy a Variable Annuity?

The One Article You Need to Read Before You Buy a Variable Annuity

There has already been a lot written about variable annuities and for good reason. It is hard to walk into a bank without hearing the argument that you are leaving money on the table given the low interest rate offered in savings accounts. This is a perfect segway to pitch a variable annuity. In my experience working with clients, these products are oversold to people that don’t fully understand them and ultimately don’t really need the features that they offer. So, let’s talk about what a variable annuity is, what some of the common benefits are, and most importantly some of the misconceptions and drawbacks of these products. Hopefully this will help you make an informed decision on whether a variable annuity is right for you.

In its most basic form an annuity is a contract between you and an insurance company where you give the insurance company money in a lump sum or over a specified period, and in return they agree to pay you an income stream (usually for life) once you decide to annuitize the contract. The main purpose of this product is longevity insurance. There are few guaranteed sources of income in retirement outside of Social Security or a pension plan. We are living longer lives and many retirees face the risk of outliving their retirement savings, so trading some of your savings now for a guaranteed income stream in retirement may not be a bad thing.

A variable annuity is a type of annuity contract that allows you to accumulate money in a subaccount where it is invested and grows on a tax-deferred basis. When you retire, the issuer will pay you a certain level of income based off the performance of the investments chosen. Essentially, you combined an investment product that grows tax-deferred until retirement with longevity insurance to mitigate the risk of outliving your money. Here are some other common features of a variable annuity.

Death Benefit- Most variable annuity contracts offer a death benefit to the beneficiary of the policy if the policyholder or annuitant were to die. The benefit is usually the amount paid into the annuity minus any withdrawals or the current contract value, whichever is higher. For an additional fee, some contracts offer an enhanced benefit that guarantees the death benefit will increase on the policy even if the market value does not.

Living Benefit- Contracts can offer benefits that the policyholder or annuitant can take advantage of while they are still living. For an additional fee, features can be added that guarantee a minimum level of income when you retire (Guaranteed Minimum Income Benefit), guarantee that you will at least get back the principal that you put in when you annuitize (Guaranteed Minimum Withdrawal Benefit), or guarantee that you will receive all your principal back after a certain holding period (usually 5 to 10 years) regardless if you annuitize the contract or not (Guaranteed Minimum Accumulation Benefit). Some of the newer products offer a benefit that allows you to take out money tax-free to pay long-term care costs.

So far so good, right? You get to participate in the performance of the stock market, have an income stream in retirement all while having the ability to leave a benefit to your beneficiaries and put in safeguards in the form of guaranteed riders to ensure a certain level of income and/or principal protection. Now let’s talk about some of the drawbacks or misconceptions of these products.

Everything comes at a cost…First, there is the basic insurance cost of an annuity which is paid through the Mortality and Expense Risk (M&E) Charge. There is also an administrative cost to service the policy, and potentially a surrender charge if you were to withdraw money from the contract before a stated surrender period which could be as long as 10 years. The subaccounts that are invested in also have their own underlying fees. As stated earlier, the enhanced death benefit or other living benefits are added to a policy for an additional fee. All in, just the M&E, administrative, and investment fees can easily pass 2% annually, and if optional benefits are added, the fee can be much higher.

Clearing up the tax benefits… Since you already receive tax-deferred treatment on contributions to a qualified (retirement) account, you only see an added tax benefit in a non-qualified (non-retirement) account. It’s also important to understand that the contribution is not made with pre-tax dollars. Therefore, there is no immediate tax benefit on the contribution. The only tax deferral benefits you are gaining is on the potential investment gains. But remember, in a variable annuity these gains will be taxed at the ordinary income rate when you withdraw or annuitize the money, not the long-term capital gain rate which is usually more favorable. Withdrawals prior to age 59 1/2 may be subject to a 10% IRS penalty, also. Another difference to a traditional investment is that if you leave an investment with a capital gain to your children, the IRS allows these beneficiaries a step-up in basis where they will receive the assets at the fair market value tax-free. Without additional estate planning, that is not the case with variable annuities. Non-spousal beneficiaries will be responsible to pay the tax on the gains from your original investment.

The word “Guarantee” is thrown around a lot but…Do these contracts really protect my money from a market downtown? Yes and no. These contracts usually guarantee a certain level of death benefit or income stream if you were to annuitize the contract in retirement. In most cases, they are not guaranteeing a certain market value in the account if you were to surrender the contract or needed to make a withdrawal. In this case, you will receive the market value at the time, minus potential tax penalties and any surrender fees if it is still in a surrender period. If the market is lower than where you invested the money, you will be subject to investment losses. As with all insurance products, all guarantees are based on the claims-paying ability of the issuing insurance company.

Other things to consider…The surrender period itself is a reason that a variable annuity might not be a good investment choice. During the surrender period, you could be penalized for withdrawals, so a variable annuity is not considered a liquid asset. Another drawback is that you are limited to the investment choices offered within the annuity. An investment account could offer you many more choices of mutual funds and ETFs, potentially at a lower investment cost.

I should also mention…It may seem that I am pretty hard on variable annuities in this article, but I should mention a couple of other benefits. Depending on your state, the value in these contracts may be protected from creditors. Also, the proceeds of a variable annuity avoid probate when they are paid to your beneficiary.

I hope this article clears up some of the misconceptions of this popular financial product. If you are unsure about the risks and costs associated with a specific variable annuity contract or if it is the right product given what you are looking to achieve, please reach out and I’d be happy to help.

Annuities are long-term, tax-deferred investment vehicles designed for retirement purposes. Guarantees are based on the claims-paying ability of the issuer. Withdrawals made prior to age 59½ are subject to a 10-percent IRS penalty tax, and surrender charges may apply. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. The investment returns and principal value of the available subaccount portfolios will fluctuate, so the value of an investor’s unit, when redeemed, may be worth more or less than the original value. Optional features available may involve additional fees. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the variable annuity, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.

Securities offered through LPL Financial, Member of FINRA/SIPC and investment advice offered through Stratos Wealth Partners Ltd., a Registered Investment Advisor. Stratos Wealth Partners, Ltd. and Lob Planning Group are separate entities from LPL Financial.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

What is an ETF?

How Well Do You Understand ETFs?

How Well Do You Understand ETFs?

Investors often look at exchange traded funds (ETFs) as interchangeable with common stock of public companies. They are both identified by 3 or 4 letter monikers and are accessible throughout the trading day. However, what investors must realize is that is where the similarities end. Before becoming a financial advisor, I spent 10 years as a market maker providing liquidity in ETFs. I focused on finding arbitrage opportunities, or inefficiencies, between an exchange traded fund and its underlying constituents. From my experience, I can tell you that in most cases an ETF is only as liquid as the market it represents. There can be added costs associated with the underlying assets that could affect the price paid for an ETF and its performance. For an investor, liquidity is never an issue until you actually need it.

The potential exception to this would be ETFs that track investment grade and high yield bond indexes in the U.S.. I provided liquidity during the financial crisis of 2008, and found more liquidity in the ETFs than in the underlying bonds. These products were widely used for purposes outside of long term investing. There was enough liquidity on both sides to provide a healthy market. Investors flocked to these products to find price discovery in some of the most turbulent days of the crisis. But in most cases, the underlying holdings drive the behavior of the ETF, not the other way around.

Index investing has been around for a while. The first exchange traded fund launched in the U.S. on the American Stock Exchange in 1993. I started my career on Wall Street in 2001 on the floor of the American Stock Exchange and worked close to the group of traders that made markets in many ETFs. With advances in algorithmic trading, this market has become more efficient. Trades occur in fractions of a second aided by computers, eliminating the need for a physical location to transact.

The reason for this efficiency is because these market makers are able to hedge their risk with an offsetting position in the components of the index. For example, if a market maker in an ETF sold shares in the market, they are able to offset that sale by purchasing shares of the individual stocks of the underlying companies. At the end of the day they aim to deliver the shares of the individual stocks that they purchased to the ETF issuer. In return, the issuer will deliver shares of the ETF to cover the sale they made during the day. This is called a creation, because more shares of the ETF are created to satisfy inflows by investors. If investors were selling the ETF, the market maker could deliver those shares to the issuing company in return for shares of common stock. This is called a redemption, since it would decrease the shares outstanding in the market.

But what happens if an ETF is holding assets that aren’t as liquid as the top 500 companies in the U.S.? ETFs often hold companies with a small market capitalization. Some have international holdings where the fund needs to hedge currencies that may not be very liquid. Those holdings may also have high transaction costs or local taxes associated with them. Fixed income ETFs often hold debt instruments that don’t trade very often. These issues can be amplified during periods of volatility. Sometimes an ETF will implement strategies that use derivatives like options or swaps to create leverage. ETFs can track commodities where futures contracts are the only way to gain access. Derivatives can also add unintended costs that are passed on to the investor through the price paid in the market. These factors can also affect the ongoing performance of the investment.

The universe of ETFs continues to grow, becoming increasingly complex. ETFs allow everyday investors access to areas of the market that once were only available to institutional investors. If you are unsure about the risks and costs associated with the underlying assets held by an ETF, speak with a professional.

An exchange-traded fund (ETF) is similar to a mutual fund that tracks a specific stock or bond index, such as the Barclays Capital 1-3 Year Treasury Index. ETFs trade on one of the major stock markets and can be bought and sold throughout the trading day, like a stock, at the current market price. And, like stock investing, ETF investing involves principal risk-the chance that you won’t get all the money back that you originally invested-market risk, underlying securities risk, and secondary market price.

*High yield/junk bonds (grade BB or below) are not investment grade securities, and are subject to higher interest rate, credit, and liquidity risks than those graded BBB and above, They generally should be part of a diversified portfolio for sophisticated investors.

Investors should consider the investment objectives, risks, charges and expenses of the Exchange Traded Fund carefully before investing. The prospectus and, if available, the summary prospectus contain this and other important information about the Exchange Traded Fund. You can obtain a prospectus and summary prospectus from your financial representative. Read carefully before investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. An investment in Exchange Traded Funds (ETF), structured as a mutual fund or unit investment trust, involves the risk of losing money and should be considered as part of an overall program, not a complete investment program. An investment in ETFs involves additional risks such as not diversified, price volatility, competitive industry pressure, international political and economic developments, possible trading halts, and index tracking errors.

Securities offered through LPL Financial, Member of FINRA/SIPC and investment advice offered through Stratos Wealth Partners Ltd., a Registered Investment Advisor. Stratos Wealth Partners, Ltd. and Lob Planning Group are separate entities from LPL Financial.