Easy Income Portfolio: August 2026 Edition

The Easy Income portfolio is doing exactly what we built it to do.

It is collecting a substantial amount of cash from a diversified group of investments that do not all depend on the same economic outcome, the same interest-rate forecast or the same direction for the stock market.

Based on the current portfolio spreadsheet, the average indicated yield across our 14 positions is 10.10%.

That is an extraordinary level of portfolio income in an environment where broad credit conditions remain healthy, financial conditions remain loose and many of the securities we own are still priced as though considerably more trouble is coming.

That last point is worth spending some time on because it gets to the heart of what is happening in the income markets right now.

There are plenty of scary headlines.

Private credit defaults have increased.

The weakest junk bond borrowers are under pressure.

Office real estate continues to be a problem.

Interest rates remain volatile, and there is no shortage of people willing to tell you that the next great financial accident is right around the corner.

The actual credit markets are telling us something much less dramatic.

The Credit Dashboard Remains in Nirvana As of Aug.

13, the ICE BofA U.S.

High Yield Index option-adjusted spread was 271 basis points.

Our Caution line is approximately 350 basis points, so we remain comfortably below the level that would cause us to start becoming defensive.

AA corporate spreads were just 58 basis points, which tells us that the market sees very little stress among higher-quality borrowers.

The Chicago Fed National Financial Conditions Index was negative 0.549 for the week ended Aug.

7, meaning financial conditions remain looser than historical averages.

There is one obvious warning light.

CCC and lower-rated spreads were 1,024 basis points.

The weakest companies are having trouble, and that is not something we should ignore.

After several years of higher borrowing costs, companies with too much leverage, inadequate cash flow and poor capital structures are finding refinancing considerably more difficult than it was during the free-money era.

The dashboard looks like this: Broad high yield: 271 basis points CCC and lower: 1,024 basis points AA corporate bonds: 58 basis points National Financial Conditions Index: Minus 0.549 That is not the same thing as a broad credit crisis.

If problems at the bottom of the credit market were beginning to spread throughout the financial system, we would expect broad high-yield spreads to be climbing rapidly through 350 basis points and eventually toward 500.

We would expect AA spreads to widen.

We would expect financial conditions to tighten.

None of that is happening.

The credit markets are not telling us that the world is ending.

They are telling us to distinguish between good credit and bad credit.

That is an environment we can work with, and it is particularly well suited to the structure of the Easy Income portfolio.

Where the Portfolio Stands The portfolio currently consists of 14 holdings generating income from very different parts of the market: VanEck BDC Income ETF (BIZD) — 11.36% indicated yield ArrowMark Financial Corp. (BANX) — 9.37% Dorchester Minerals LP (DMLP) — 11.48% Saba Closed-End Funds ETF (CEFS) — 5.97% Tortoise Energy Infrastructure Corp. (TYG) — 12.11% Virtus InfraCap U.S.

Preferred Stock ETF (PFFA) — 9.70% State Street Blackstone Senior Loan ETF (SRLN) — 7.29% Special Opportunities Fund (SPE) — 14.74% abrdn Asia-Pacific Income Fund (FAX) — 13.72% WisdomTree Private Credit and Alternative Income Fund (HYIN) — 12.98% Simplify MBS ETF (MTBA) — 5.00% Angel Oak Financial Strategies Income Term Trust (FINS) — 10.90% Infrastructure Capital Bond Income ETF (BNDS) — 8.05% iShares Mortgage Real Estate ETF (REM) — 8.73% What I like most about that list is not simply the amount of income.

It is where that income comes from.

BIZD and HYIN give us exposure to private credit.

DMLP gives us direct participation in oil and natural gas royalty cash flows.

TYG owns energy and power infrastructure.