Weekly review: How the US Treasuries and corporate bonds performed (Part 9 of 10)
Headwinds–weak demand or less supply?
Considering the fact that Exxon Mobil Corporation’s issuance (XOM) (which we discussed in part 8) was fairly welcomed in the market, it seems like last week’s funds flow decline was merely a reaction to low supply available in the market. Nearly $2.2 billion funds have been invested in the Investment-Grade corporate bonds (LQD) —$1.0 billion lesser than the previous week’s funds flow of $3.2 billion.
The funds flow for the month of March 2014 totaled $7.9 billion compared to $9.9 billion for the month of February 2014.
The investment-grade corporate bond tradable equivalents such as iSharesIBoxx $ Investment Grade Corporate Bond Fund (LQD) posted an inflow of $21.8 million last week, a reversal to the previous week’s outflow of $28.1 million. The LQD ETF price gained 0.07% despite the rise in the U.S. ten-year Treasury yield, which ended the week at 2.75%.
iShares IBoxx $ Investment Grade Corporate Bond Fund (LQD) with top holdings in the Verizon Communications (VZ) and Apple (AAPL) seeks investment results that correspond to the price and yield performance, before fees and expenses, of the corporate bond market as defined by the iBoxx $ Liquid Investment Grade Index. Verizon Communications (VZ) is an American broadband and telecommunications provider, while Apple (AAPL) is an American multinational corporation that designs, develops, and sells consumer electronics, computer software, and personal computers. The ETF with gross expense ratio of 0.15% posted a one-month funds inflow of $56.2 million.
Browse this series on Market Realist:
- Part 1 - Why the FOMC revised the GDP and unemployment rate statistics
- Part 2 - Must know: What is driving the positive US Treasury yield curve?
- Part 3 - Must know: The trading markets available to the investors
- Investment & Company Information
- corporate bonds