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Corporate Bond ETF (GIGB) Hits New 52-Week High

Sweta Jaiswal, FRM

For investors looking for momentum, Goldman Sachs Access Investment Grade Corporate Bond ETF GIGB is probably a suitable pick. The fund just hit a 52-week high and is up 26.6% from its 52-week low price of $43.65/share.

Let’s take a look at the fund and its near-term outlook to gain an insight into where it might be headed:

GIGB in Focus

This ETF seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Goldman Sachs Investment Grade Corporate Bond Index. It has AUM of $505.9 million and charges 14 basis points (bps) in annual fees.

Why the Move?

The Federal Reserve has announced new initiatives to support the ailing U.S. economy. The central bank has pledged to make individual corporate bonds purchases under its Secondary Market Corporate Credit Facility (SMCCF), adding liquidity to the market. Notably, under the SMCCF emergency lending program that has a capacity of $250 billion, the Fed has already invested about $5.5 billion in ETFs that buy corporate bonds. The Fed has pledged to keep pumping in stimulus to support the economy and strengthen it. These factors are making funds like GIGB attractive investment options. Also, the coronavirus outbreak raising global economic slowdown concerns might spur demand among investors.

More Gains Ahead?

It seems like the fund will remain strong, with a positive weighted alpha of 6.70, which gives cues of further rally.

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Goldman Sachs Access Investment Grade Corporate Bond ETF (GIGB): ETF Research Reports
 
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