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  5. DXV: this is a gold rated etf with morningstar, but if relied on for retirement income , what are chances the distributions could drop well below the current stated 6. [Dynamic Active Investment Grade Floating Rate ETF]
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Q: this is a gold rated etf with morningstar, but if relied on for retirement income , what are chances the distributions could drop well below the current stated 6.4 %
Asked by Tom on December 19, 2023
5i Research Answer:

Indicated yield right now is already lower, at 5.6%. As a fund that focuses on floating rate bonds, its income will likely decline if rates decline. Its effective duration of its portfolio is only 2.4 years, so it only has somewhat limited sensitivity to rates increasing the value of its holdings. We would expect distribution yield to slowly fall here.