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|Day's Range||106.64 - 106.77|
|52 Week Range||105.71 - 107.10|
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As the capital markets were in the thick of the extended bull run that peaked in the summer prior to the October sell-offs, high-yield assets saw an influx of investor capital, beating out their higher-rated rivals in investment-grade corporate bonds. After investors got washed through the October volatility cycle, that may have tamped down their risk-on sentiment and this is where Goldman Sachs sees a potential buying opportunity after investment-grade debt fell out of favor during the bull run. With investors hungry for risk, the yields in investment-grade corporate bonds weren't enough to satiate that appetite.
The iShares Intermediate-Term Corporate Bond ETF (IGIB) is the new look on the exchange traded fund formerly known as the iShares Intermediate Credit Bond ETF (CIU) . IGIB “seeks to track the investment results of an index composed of U.S. dollar-denominated investment-grade corporate bonds with remaining maturities between five and ten years,” according to iShares. IGIB tracks the ICE BofAML 5-10 Year US Corporate Index.
Come September, emerging markets will be watching the Federal Reserve closely with respect to monetary policy or even more specifically, what the central bank decides to do with interest rates. A rising dollar could mean financial instability for emerging market nations trying to pay outstanding U.S. debt obligations with local currencies. Rising interest rates may also discourage foreign investment into emerging market nations in favor of assets based in the U.S.
VCIT, one of the largest intermediate-term corporate bond exchange trade funds, is also one of the least expensive funds in this category. “This fund is one of the lowest-cost options in the corporate-bond Morningstar Category, and it has a strong index-tracking record. VCIT, which holds over 1,700 bonds, has an average duration of 6.3 years.
Growing tensions between the Unites States and Turkey hit the benchmark 10-year Italian bond yield as it rose to 3.102, almost matching its highest level over two months ago as concern regarding the country's banking sector and its exposure to Turkish borrowers gave investors reason to fret. Exacerbating the issue is a shaky Italian government and persistent questions marks with respect to its political health. “You have risk aversion and concerns about Turkey contagion risk hitting Italy against a backdrop of the Italian government not quite on the firmest footing,” said David Vickers, a senior portfolio manager at Russell Investments in London. Turkey continues to face ongoing pressure on its currency as well as its bonds, which has replaced Argentina as the worst performer for bond investors, according to a report by Bloomberg. Against the dollar, the Turkish lira has experienced a Niagara Falls-like drop to its current, depressed levels the past week.
While the Turkish lira has been languishing amid geopolitical tensions with the United States, U.S. corporate bond-focused fixed-income ETFs edged higher, such as the iShares Intermediate Credit Bond ETF (CIU)--up 0.16%, iShares iBoxx $ Invmt Grade Corp Bd ETF (LQD)--up 0.13% and Vanguard Interm-Term Corp Bd ETF (VCIT) --up 0.20%. CIU tracks the investment results of the Bloomberg Barclays U.S. Intermediate Credit Bond Index. CIU focuses on investment-grade corporate debt and sovereign, supranational, local authority and non-U.S. agency bonds that are U.S. dollar-denominated and have a remaining maturity of greater than one year and less than or equal to ten years.
U.S. government debt yields fell today on meek inflation data as the U.S. Labor Department revealed that its U.S. producer price index was unchanged in July, falling short of the 0.2% increase expected by a Reuters poll of economists. The yield on the benchmark 10-year Treasury note fell to 2.937 while the 30-year note went down to 3.074 as of 3:15 p.m. ET. The Labor Department data also showed that In the 12 months through July, the core PPI increased by 2.8%, which follows a 2.7% increase in June.
Turkey continues to face mounting pressure on its bonds, which has caused the country to replace Argentina as the worst performer for bond investors, according to a report by Bloomberg. The benchmark Turkey 10-year bond yield has risen by over 55% since May to its current level of 18.22 as of 2:00 p.m. ET. In addition, Turkey’s stock index is the worst-performing of the major global markets thus far this year.
Benchmark Treasury yields rose as the U.S. Treasury Department is in the midst of selling off $34 billion worth of 3-year Treasury notes. The benchmark 10-year Treasury yield rose to 2.971 while the 30-year ...
While the benchmark 10-year Treasury yield slipped to 2.934 today, 5% yields are not beyond the realm of possibilities in the government debt space, according to JPMorgan Chase CEO Jamie Dimon. "I think rates should be 4 percent today," said Dimon. In addition to the benchmark Treasury 10- year yield, the 30-year yield also edged lower to 3.077 as of 2:45 p.m. ET.
Among intermediate-term corporate bond exchange traded funds, the iShares Intermediate Credit Bond ETF (NASDAQ: CIU) is a popular option. CIU, which is over 11 years old, “seeks to track the investment ...
In ETF Trends’ Part 1 of looking at the best fixed-income ETFs to have during a recession, four ETFs were introduced that underscored the need to have shorter terms if possible and investment-grade holdings ...
The Dow Jones Equal Weight U.S. Issued Corporate Bond Index has been inching up higher year-to-date--about 27 percent--and interest in these four corporate bond ETFs has increased in the past five days, possibly signaling more capital inflows from fixed income investors seeking higher yields. Vanguard Long-Term Corporate Bd ETF (VCLT) tracks the performance of a market-weighted corporate bond index with a long-term dollar-weighted average maturity and is up 0.46% today. SPDR Portfolio Short Term Corp Bd ETF (SPSB) corresponds to the price and yield performance of the Bloomberg Barclays U.S. 1-3 Year Corporate Bond Index.