These three exchange-traded funds are part of the Alternative Income sector, as each is pegged to different and specialized segments of the market, suggests Doug Fabian, editor of High Monthly Income.

Each of these funds were chosen to help boost our total return in what we call a transitional bond market, meaning that these funds are likely to do well considering the volatility in bonds, the general rising interest rate environment, and the uncertainty inherent in a turbulent income world.

First Trust Senior Loan Fund (FTSL) is an actively managed ETF that seeks to provide high current income by investing primarily in a diversified portfolio of first lien senior floating rate bank loans.

Under normal market conditions, the fund will invest at least 80% of its net assets in senior loans that are made, predominantly, to businesses operating in North America.

But it also may invest up to 20% of its net assets in non-senior loan debt securities, including high-yield bonds, warrants, and equity securities.

FTSL tends to perform well in a rising interest rate environment, as the loans in its portfolio are far less subject to the adverse effects of rising bond yields.

The iShares Mortgage Real Estate Capped (REM) is an ETF that contains a basket of the biggest and best mortgage REITs on the market today.

This fund is pegged to the FTSE NAREIT All Mortgage Capped Index, a benchmark measure that includes top names in the space such as Annaly Capital (NLY), American Capital Agency Corp. (AGNC), Starwood Property Trust (STWD) and Two Harbors Investment Corp. (TWO).

With REM, you are getting exposure to the best of the best mortgage REITs available. You also are getting that exposure on a pullback, as REM's value tumbled during the June sell-off.

The PowerShares CEF Income Composite (PCEF) is an ETF pegged to the S-Network Composite Closed-End Fund Index.

This fund effectively gives you exposure to a basket of the best income-oriented, closed-end funds out there. These closed-end funds represent a montage of the equity and bond income universe.

Here you get dividend-paying closed-end funds, bond-oriented closed-end funds, and hybrids closed-end funds that contain both equities and bonds. Like REM, the recent pullback in PCEF represents a great, low-risk entry point.

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