What Is the GraniteShares HIPS High Income ETF?

The GraniteShares HIPS High Income ETF is a multi-asset, high-income ETF that pursues income by index-tracking US pass-through securities with strong cash distribution profiles, including REITs, MLPs, business development companies, and closed-end funds. It combines multiple income asset classes into a single vehicle to capture diversification benefits.

Rather than selecting individual REITs or MLPs one by one, the fund offers a single point of diversified exposure to high-yield, high-distribution asset classes, making it well suited for income-focused investors seeking steady cash flow.

The ETF is operated by GraniteShares on a passive (index-tracking) basis.

The fund selects and weights US securities operating under a pass-through structure — such as REITs, MLPs, business development companies, and closed-end funds — that distribute the majority of earnings to investors, following the rules of the underlying index. By combining different income asset classes, it pursues high distribution yields while reducing single-sector concentration risk.

• Multi-asset income structure that bundles multiple high-yield asset classes into a single product
• Monthly distribution focus

Size and Cost (AUM and Expense Ratio) of the GraniteShares HIPS High Income ETF

Assets under management (AUM) stand at $93.2M, with a total expense ratio of 1.17% per year.

Unlike single-asset-class income ETFs, the fund combines multiple pass-through asset classes to diversify the sources of its distributions.

High-yield, high-distribution asset classes have historically been sensitive to the direction of interest rates and the credit environment, and given their elevated distribution yields, price action has tended to exhibit volatility in line with rate cycles and economic conditions.

During periods of strong income demand, capital tends to flow into high-distribution products, whereas in rising-rate environments, the relative appeal of these funds versus bonds typically contracts, leading to slower capital flows.

Diversifying across multiple high-income asset classes to pursue cash flow is a key strength, while interest rate and credit risks along with distribution volatility are commonly cited weaknesses.

The five funds listed in the table — FPEI, INCM, YLD, MDIV, and IYLD — all pursue income but differ in their approaches, spanning preferred stocks and multi-asset strategies. Beyond the table, alternatives worth considering include the preferred-stock-focused PFF, the MLP-concentrated AMLP, and the globally diversified high-dividend SDIV, all of which can help compare the income characteristics of different asset classes.

Here are key points to review before investing in HIPS. Given the elevated distribution profile, it is essential to examine in advance the risks specific to each underlying asset class, the costs involved, and the stability and sustainability of distributions.

High-distribution asset classes are exposed simultaneously to interest rate, credit, and economic cycles, so during periods of market stress, price declines and distribution cuts can occur at the same time. Investors should look beyond the headline yield and weigh the underlying risks.

For income-focused investors seeking diversified exposure to multiple high-yield pass-through asset classes through a single vehicle, this ETF is a candidate worth considering. However, it is advisable to also examine the volatility tied to interest rates and credit conditions, as well as the durability of distributions.

Diversifying across multiple high-income asset classes to pursue cash flow is a key strength, while interest rate and credit risks along with distribution volatility are commonly cited weaknesses.

The five funds listed in the table — FPEI, INCM, YLD, MDIV, and IYLD — all pursue income but differ in their approaches, spanning preferred stocks and multi-asset strategies. Beyond the table, alternatives worth considering include the preferred-stock-focused PFF, the MLP-concentrated AMLP, and the globally diversified high-dividend SDIV, all of which can help compare the income characteristics of different asset classes.

Here are key points to review before investing in HIPS. Given the elevated distribution profile, it is essential to examine in advance the risks specific to each underlying asset class, the costs involved, and the stability and sustainability of distributions.

High-distribution asset classes are exposed simultaneously to interest rate, credit, and economic cycles, so during periods of market stress, price declines and distribution cuts can occur at the same time. Investors should look beyond the headline yield and weigh the underlying risks.

For income-focused investors seeking diversified exposure to multiple high-yield pass-through asset classes through a single vehicle, this ETF is a candidate worth considering. However, it is advisable to also examine the volatility tied to interest rates and credit conditions, as well as the durability of distributions.