112.53 -0.02 (-0.02%)
After hours: 4:15PM EST
|Bid||0.00 x 1300|
|Ask||0.00 x 3200|
|Day's Range||112.45 - 112.68|
|52 Week Range||111.25 - 121.85|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||1.38|
|Expense Ratio (net)||0.15%|
Investors in search of yields close to those of corporate bonds—with significantly less credit risk—should consider taxable muni-bond funds.
Five charts show why investors and regulators worry about the building risks in corporate debt, say analysts at HSBC.
As experts of financial markets and the economy debate whether there will be a recession next year or later, the chances of that one will come eventually are certain. A recession is defined as two consecutive quarters of negative GDP growth. "Certainly, there's growing risk of recession -- 2019, 2020, going forward," Chief Economist at LendingTree, Tendayi Kapfidze told TheStreet.
U.S. natural gas had a wild ride over the past week as investors were caught off guard by updated weather forecasts as well as reduced stocks. Oil moved in the opposite direction for the better part of the month as glut worries took prices back to October 2017 levels. On the currencies front, the U.S. dollar continues its march against the troubled euro and British pound. Last week has been mostly about the energy sector so leading companies in the field have trended accordingly. Investment grade corporate bonds closed the list as investors reevaluate the risk of placing funds in such assets. Check out our previous Trends edition at Trending: Investors Steer Towards Dividend Yields Amid Market Turmoil.
The year 1983 saw the James Bond movie, "Never Say Never Again," feature Sean Connery for the last time as "Agent 007." Of course, subsequent actors would eventually assume the mantle as the secret service agent, but the movie title serves as a reminder to investors that they should never say never to bonds again, especially after the latest stock market declines. Tuesday's sell-offs, which saw the Dow Jones Industrial Average lose 2.21%, while the Nasdaq Composite shed 1.7% and the S&P 500 declined 1.8%, brought in a flurry of investors to bonds. Much of the blame for the latest declines have been directed towards FANG stocks (Facebook, Amazon, Netflix, Google-Alphabet), which have plundered U.S. equities with a decline of more than 20% from their 52-week highs.
The iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) is not just the largest investment-grade corporate bond exchange traded fund. It is one of the largest fixed income ETFs of any variety. Over its more than 16 years on the market, LQD has played an increasingly important role in helping investors of all stripes gain cost-effective, liquid exposure to a broad basket of high-grade corporate debt.
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.
During a volatile October month, traders headed for the entrance to bond exchange-traded funds (ETFs) just as often as they headed for the exits. In particular, trader volume soared the most in the iShares Core US Aggregate Bond ETF (AGG), which saw $2.6 billion in withdrawals or 5% assets under management. Next, the iBoxx $ Invmt Grade Corp Bd ETF (LQD) experienced an outflux of 6% of its assets under management.
Some fixed income exchange traded funds are languishing amid the Federal Reserve's 2018 rate tightening plans, prompting investors to depart some longer-dated, traditional bond ETFs. “Despite growing demand ...
The Federal Reserve has raised interest rates three times this year and is eyeing another rate hike in December, moves that are plaguing some traditional fixed income exchange traded funds. “ Despite growing demand for bond ETFs in 2018, one of the industry’s oldest and largest products is among the least popular this year,” said CFRA Research Director of ETF & Mutual Fund Research Todd Rosenbluth in a note out Monday. Investment-grade corporate bond ETFs that can help investors hedge rate risk while maintaining exposure to credit opportunities include the ProShares Investment Grade—Intr Rt Hdgd (CBOE:IGHG) and the iShares Interest Rate Hedged Corp Bd ETF (LQDH) .
Municipal bonds and related exchange traded funds may not be the most exciting asset category, but they have been holding up relatively well in the fixed-income space. “Muni performance has been nothing ...
The Federal Reserve has hiked interest rates three times this year, prompting some fixed income investors to depart some of the largest bond ETFs. For example, the SPDR Barclays High Yield Bond ETF (JNK) and the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) are among the top 10 ETFs in terms of year-to-date outflows. The Federal Reserve’s rising interest rates have been a main contributing factor in the downfall of investment-grade bonds this year.
With volatility spiking and the markets being thrown into chaos, investors have turned to ETFs as one of their go-to tools to access the markets. For example, on Tuesday when U.S. Markets were down 3.8% and the CBOE Volatility Index or VIX jumped to a 23 reading from 16, 35% of the total notional market value was attributed to ETF exchanging hands, according to Deutsche Bank data. Furthermore, looking at the outflows in iShares iBoxx $ High Yield Corp Bd ETF (HYG) , SPDR Barclays High Yield Bond ETF (JNK) , iShares Core US Aggregate Bond ETF (NYSEArca: AGG) and iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) with a combined excess of over $7 billion, it is worth mentioning that there are dozens of ETFs that are built as an alternative to simply holding cash.
"I think fixed-income portfolio managers have had their come to Jesus moment," said Janet Johnston, TrimTabs asset management portfolio manager. "They were going with the Fed, not fighting with the Fed. Since 1998, when rates have gone up, stocks have gone up. The lockstep between stocks and bonds as of late is not something typically seen within the capital markets as both are prone to marching to the beat of their own drum.
Investment-grade debt and bond-related exchange traded funds just can't catch a break this year. U.S. investment-grade debt has experienced one of the worst performance of any major sector of the fixed-income asset class so far this year, CNBC reports. ETF investors have also been avoiding the asset category, pulling some $3.5 billion from LQD so far this year, according to XTF data.
The iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) is the largest exchange traded fund dedicated to investment-grade corporate debt and remains the go-to choice for many investors looking to asset this asset class. LQD seeks to track the investment results of the Markit iBoxx USD Liquid Investment Grade Index composed of U.S. dollar-denominated, investment-grade corporate bonds. LQD allocates 95 percent of its total assets in investment-grade corporate bonds to mitigate credit risk.
Broad investment-grade bond index funds sometimes get a bad rap for their bias toward Treasuries and agency mortgage-backed securities, which limits their yield. Investors can accomplish that more cheaply by buying an investment-grade corporate-bond index fund like iShares iBoxx $ Investment Grade Corporate Bond ETF LQD . There is a lot to like about this fund, from its durable cost advantage to its broadly diversified market-cap-weighted portfolio that approximates the composition of the U.S.-dollar investment-grade corporate-bond market.
Last week, the Federal Reserve hiked interest rates for the third time this year, setting the stage for another rate hike in December and several more interest rate increases in 2019. Some fixed income ...
Earlier this week, the Federal Reserve raised interest rates for the third time this year , setting the stage for another rate hike of 25 basis points in December and perhaps several more increases in ...
Investors appear ready to continue forward with the rate-hiking prescription written for the federal funds rate by the Federal Reserve who will announce their interest rate decision later today. It's widely expected that Fed Chairman Jerome Powell will announce another rate hike to temper economic growth, causing benchmark Treasury yields to retreat--the 10-year fell to 3.078 and the 30-year yield notched lower to 3.213. The Fed began its two-day monetary policy meeting yesterday as they are likely to pore over a bevy of data showing the economy is moving forward at full speed, including an extended bull stock market run that has already seen major indexes like the S&P 500 reach record levels.
The iShares Core U.S. Aggregate Bond ETF (NYSE: AGG), the largest U.S.-listed fixed income exchange traded fund, reached its 15th birthday Sept. 22, making it an appropriate time to examine the bond ETF boom. When AGG debuted, a scant number of bond ETFs were on the market. Various data points indicate the growth of bond ETFs will continue.
The Institute for Supply Management released a report on Thursday that revealed a growth increase in U.S. service sector activity--a pace that was higher than expected in the month of August. "There was a strong rebound for the non-manufacturing sector in August after growth 'cooled off' in July," said Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee.
The fixed-income market has played second fiddle to equities, but there are still areas of opportunity that bond exchange traded fund investors can look to. “The fixed income market remains challenging, ...