At this point it's no secret that investors have been craving new income solutions. With the Federal Reserve continuing to keep interest rates at historical lows, traditional sources of income including CD's, money market funds and bond funds like the iShares Barclays 7-10 Year Treasury (ARCA:IEF) have all but dried-up in this new environment. To that end, investors have plowed billions into various other sectors and assets in order to gain a little more yield. However, managing a complex income plan can be a daunting task. Securities including REITs and MLPs, along with hybrid bonds like convertible bonds, all come with their own unique challenges and advantages. Luckily, the exchange-traded fund (ETF) boom has you covered.

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Income Allocation
With more investors searching outside the norm for various sources of income, Wall Street has come to the rescue with a variety of new products designed to make managing those assets easier. Investment staple balance funds--which blend both stocks and bonds--have received a new face lift. These new multi-asset plays, include weightings to junk bonds, emerging market stocks, preferred stocks and even real estate and pipeline partnerships, as well as exposure to traditional stocks and investment-grade bonds. Ultimately, these new funds can serve as a one-stop shop for diversified income exposure and address a portfolio's need for higher and stable income.

SEE: 5 Popular Portfolio Types

At their core, these new multi-asset income funds strive to provide high income relative to traditional metrics, long-term capital appreciation and diversification with lower volatility. Additionally, the new ETFs eliminate some of the complexities of holding some of these asset classes individually. For example, investors holding individual MLPs like Magellan Midstream (NYSE:MMP) are considered limited partners and receive K-1 statements. That can be a headache come tax time. The new funds are able to pass through most of the MLP distributions to shareholders as return of capital or ordinary income without K-1 statements.

SEE: 5 Ways To Save On Investments

A Look Under the Hood
While the multi-asset income sector is fairly new, there has been an impressive amount of launch activity as of late and there are now five to choose from. However, each one sticks to its own investment style, collection of assets and risk profiles. It's important to look under the hood of each to determine which fits best in your portfolio.
The oldest in the category is the Guggenheim Multi-Asset Income (ARCA:CVY). Launched in 2006, the fund features holdings in a number of different asset classes, including common stocks, REITs, closed-end funds, MLPs, preferred stocks and Canadian royalty trusts. Top holdings include Pengrowth Energy (NYSE:PGH) and BlackRock Build America Bond Trust (NYSE:BBN). The diversity of holdings helps the fund produce a strong 5% yield. Guggenheim also offers an international version, with its International Multi-Asset Income ETF (ARCA:HGI).

SEE: 3 Steps To A Profitable ETF Portfolio

Two of the new ETF launches take a "fund of funds" approach to multi-asset income. Both the SPDR SSgA Income Allocation ETF (ARCA:INKM) and the iShares Morningstar Multi-Asset Income (BATS:IYLD) will invest in other ETFs issued by respective sponsors. The iShares fund is currently the more conservative option with nearly 60% in fixed income holdings like the iShares iBoxx $ Invest Grade Corp Bond (ARCA:LQD). The fund rounds out that exposure with a 30% to U.S. dividend paying stocks via the iShares Dow Jones Select Dividend ETF (ARCA:DVY). The SPDR takes a different approach and uses active management to achieve its goals and only features a 40% weighting to fixed income securities.

Finally and perhaps the riskiest of the category is the Arrow Dow Jones Global Yield ETF (ARCA:GYLD). Instead of betting on other funds, the ETF holds individual securities across a variety of asset classes. That includes hefty weightings to global equities, global real estate and energy-related issues like MLPs and CANROYs.

SEE: An Introduction To Canadian Income Trusts

The Bottom Line
With more investors looking for income in non-traditional asset classes, managing all of those moving pieces is getting complicated. Luckily, the ETF boom is there to help. Wall Street has recently unveiled a series of multi-asset income funds designed to produce high yields from a wide range of sources.

At the time of writing, Aaron Levitt did not own shares in any of the companies mentioned in this article.

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