iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD)
LQD: Rock-Bottom Options-Adjusted Spread, Unfavorable To Treasuries
Low options-adjusted spread (OAS) of IG bonds limits upside potential and increases downside risk, making them less attractive compared to US Treasury bonds. State taxes on corporate bond interest payments further reduce their after-tax yield, making Treasurys more favorable for investors in high tax brackets. Investors bullish on bonds should prefer US Treasurys, while those bullish on corporate credit spreads should consider a barbell strategy involving common stocks of lenders.
LQD: Getting Ready For 3% Cash Yields, IG Credit Still Appealing
I maintain a buy rating on LQD due to its solid 4.8% yield and favorable technical momentum, despite the Fed's rate cuts. LQD offers exposure to a broad range of U.S. investment-grade corporate bonds, with a YTM of 4.82% as of September 2024. The ETF's technicals are strong, with shares trending higher, a bullish RSI, and a breakout above key resistance levels.
No Summer Vacation for ETFs as Flows Near Record Pace in July
Plenty of investors may be out of office this summer, but ETFs aren't on vacation. Despite ETFs frequently seeing Summer lulls, this year inflows are nearing a record pace.
LQD: A Great Way To Access Investment Grade Bonds
Fed pivots towards rate-cutting cycle, potential end of a bear market. iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) offers broad exposure to US investment-grade corporate bond market. LQD has diverse holdings, low credit risk, 4.32% yield, and potential for upside appreciation.
How to immunize your bond ETF if interest rates turn back up
The best time to buy insurance is when whatever it is you're insuring against is considered unlikely. So, should you hedge your bond portfolio against rising interest rates?
