Worried About a Stock Market Crash? Park Your Money in These 2 High-Yielding ETFs for Safety

As the world continues to grapple with the aftermath of the COVID-19 pandemic and the economic uncertainty that follows, investors are left wondering how to protect their portfolios from a potential stock market crash. While index funds and broad-based ETFs may seem like a safe bet, they often fail to provide the downside protection needed during market downturns. In this article, we will explore two high-yielding ETFs that can help investors navigate the current market landscape and safeguard their portfolios from potential losses.

1. Cambria Tail Risk ETF (TAIL)

The Cambria Tail Risk ETF (TAIL) is an innovative investment vehicle designed to protect investors from extreme market downturns. TAIL invests in a portfolio of "out-of-the-money" put options purchased on the U.S. stock market, allowing it to benefit from market declines and rising volatility. The ETF also allocates a portion of its assets to intermediate-term U.S. Treasuries, providing additional downside protection during market turmoil.

During the 2020 COVID-19 market crash, TAIL returned 11.3% while the S&P 500 fell by -19.6%. This impressive performance highlights the ETF's ability to generate positive returns during market downturns. Additionally, TAIL has a 30-day SEC yield of approximately 3.1%, providing investors with a attractive income stream.



2. Amplify BlackSwan Growth & Treasury Core ETF (SWAN)

The Amplify BlackSwan Growth & Treasury Core ETF (SWAN) offers investors a balanced portfolio that combines equity market upside with the downside protection offered by Treasuries. SWAN invests 10% of its portfolio in long-term S&P 500 LEAP option contracts and the remaining 90% in mixed duration Treasuries. This unique combination allows SWAN to participate in market gains while mitigating losses during market downturns.

During the 2020 COVID-19 market crash, SWAN returned 3.5% while the S&P 500 fell by -19.6%. Although SWAN's performance was not as strong as TAIL's, it still demonstrated the ETF's ability to provide downside protection during market turmoil. Additionally, SWAN has a 30-day SEC yield of approximately 2.7%, offering investors a competitive income stream.

In conclusion, investors seeking safety during a potential stock market crash should consider allocating a portion of their portfolios to high-yielding ETFs like the Cambria Tail Risk ETF (TAIL) and the Amplify BlackSwan Growth & Treasury Core ETF (SWAN). These ETFs offer investors the opportunity to generate income while providing downside protection during market downturns. By incorporating these ETFs into their portfolios, investors can better navigate the current market landscape and safeguard their investments from potential losses.