Easy Income Portfolio: March 2025 Update - 'Still Clipping Coupons, Still Getting Paid'

The EZ Income Portfolio keeps doing exactly what we designed it to do—throwing off hefty streams of income while avoiding the rollercoaster ride that comes with chasing hot growth stocks. The past month reminded us once again why boring is beautiful when you're in the income game.

Bond Market Update: Rates Steady, but Credit Matters
Treasuries bounced around in March as the bond market continues its rate cut guessing game. The Fed's recent posturing still hints at potential cuts later this year, but sticky inflation numbers keep pushing out expectations. The 10-year Treasury is hanging around the 4.2% range, down from the October peaks but still offering yields we haven't seen in decades.

For us, the critical takeaway is that these higher-for-longer yields offer a fat tailwind for bond funds and credit-sensitive investments—provided you stay away from duration traps and avoid the landmines in the commercial real estate lending market.

High-Yield Credit: Spreads Still Tight, but Cracks Emerging
High yield credit spreads have drifted slightly wider but remain historically tight. The ICE BofA High Yield Index sits around 330 basis points over Treasuries—tight by any standard. That's pricing in almost no risk of recession, which feels a bit rich given some recent bank earnings pointing to credit deterioration.

We're not running for the hills, but we're staying selective. Defaults are ticking up in the lower tiers, especially in sectors like retail, media, and over-levered real estate. If you're in junk, stick with senior loans or actively managed funds that know how to dodge the zombies.

Private Credit and BDCs: Only the Strong Survive
Private credit remains the belle of the ball, attracting waves of capital looking to replace low-yielding bonds. That's good for business development companies (BDCs), but as I've been saying for years, not all BDCs are created equal.

If you're buying BDCs, own the ones tied to the big boys—private equity and credit firms that know how to structure deals, manage risk, and raise cheap capital. Names like BANX fit that bill perfectly. They're built to survive credit cycles, not just ride the boom times. I'm still avoiding the yield-chasing BDCs loaded up on second-lien garbage.

Portfolio Ticker Update:

Preferred ETF PFFA Preferred caught a nice tailwind from falling yields in early March, but it's been range-bound since. Banks are stabilizing, which helps. You're getting paid north of 8%, so patience pays.

Special Opportunities Fund SPE One of my favorite quirky closed-end funds. It's chugging along, trading at a nice discount. Income plus potential upside when the market rediscovers CEFs.

Metaurus ETNs MTBA Still quietly printing income. This thing's quirky, but it's working—tax-efficient income for those of us who like clipping coupons.

Mortgage REIT ETF REM Mortgage REITs are a minefield, but REM is diversified. You're paid well to take the risk but watch for any signs of credit stress in mREIT holdings.

CEF ETF CEFS Discount hunting still works, and CEFS gives us diversified exposure to discounted closed-end funds. No fireworks, but it's steady.

BondBloxx BB-rated XBB One of my favorite bond ETFs. BB-rated junk is still the sweet spot—high income without diving into the deep junk pool.

Senior Loans SRLN Senior loans are the right place to hide if credit turns. Floating rates help, and you're senior in the stack. No changes here—still collecting.

Energy Infrastructure TYG Energy midstream still pays. Oil volatility doesn't matter much when you're collecting tolls. Big yield, steady cash flow.

Financial Income FINS Financials had a solid month as fears of a banking meltdown eased. Spreads are stable, and you're paid handsomely here.

Aberdeen Asia-Pacific Income FAX Asian bonds are bouncing with China stimulus chatter. Not without risk, but you're paid well to wait.

Dorchester Minerals (Ticker DMLP)  Still my favorite royalty play. These guys keep sending checks, and oil/gas prices are holding up. No debt, just cash flow.

Stone Castle Financial BANX Love this one. Tied to private credit and bank preferreds. Doing exactly what we own it for—producing income with low volatility.

Nuveen Real Asset Income JRI Real assets are steady. REITs are out of favor, but infrastructure and utilities keep the dividends flowing.

BDC ETF BIZD Broad exposure to BDCs. We're cautious here—BDC valuations are rich, but income is steady. Not adding, not selling.

High Yield Income ETF( Ticker: HYIN) Solid performer. Higher yields help, and it's done what we expected—deliver income without blowing us up.

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Final Thoughts: Clip Coupons, Stay Boring, and Get Paid
The market's still too focused on chasing AI unicorns and guessing the next rate cut. Meanwhile, we're sitting here collecting checks every month, sleeping well at night.

This portfolio isn't sexy, but it works. Diversification across preferreds, credit, energy royalties, and CEFs keeps us steady. There's no reason to get cute right now—stick with income, focus on quality, and make sure your BDCs and credit managers are backed by firms that have been through a few cycles.

As always, if we see any panic in credit markets or the next round of CEF discounts, we'll be ready to buy. Until then, stay boring and stay paid.