if your selling junk and getting paid 6-7 % are you buying utilites? getting pounded buying stocks-market down 200 friday-buying reits? crushed,buying traesuries for half the yield?i dont know where the money is going-cash?
Per the iShares website this fund has a weighted average maturity of 4.55 years and effective duration of 4.10 years. These are pretty good in my opinion and should allow the fund to rotate its portfolio quicker than funds with longer term loans, thus adjusting its yield higher as rates rise. I hope this is just not wishful thinking on my part.
Too many gloom and doomers are talking up this tapering stuff. But the home builders are screaming at Ben to get these rates down. Otherwise the housing recovery is lost. A few times this week Ben has sent out his minions to try and calm everybody. Wednesday was a great example when some guy from the FED said the tapering would be very minor. The market was down for junk in the morning and then came roaring back in the afternoon. Expect it to happen again. Maybe not today but next week for sure.
As for me I'm 60% in cash and 40% in junk. I don't like sitting here getting nothing for my money but I'm waiting for all this rate talk to subside.