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iShares Interest Rate Hedged Long-Term Corporate Bond ETF

IGBH

Market cap $274M

24.60 USD

+0.07

0.29%

At close Updated Oct 28, 9:43 AM EDT

1 day

0.29%

5 days

0.57%

1 month

0%

3 months

1.28%

6 months

0.99%

Year to date

-0.24%

1 year

-0.73%

5 years

-3.34%

10 years

2.71%

News

Positive

Neutral

Negative

Sentiment 3-Months

Positive 0%

Neutral 0%

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IGBH: Solid Rate-Hedged Investment-Grade Bond ETF, Continued Outperformance

iShares Interest Rate Hedged Long-Term Corporate Bond ETF invests in long-term investment-grade bonds, hedging out its rate risk. IGBH's bond portfolio generates a good amount of income, of around 5.2%. Dividend yields rise to 5.7% due to option premiums. The fund's rate swaps have led to outperformance in the past and reduced long-term risk and volatility.

IGBH: Solid Rate-Hedged Investment-Grade Bond ETF, Continued Outperformance

IGBH: Zero Duration Does Not Mean Zero Risk

iShares Interest Rate Hedged Long-Term Corporate Bond ETF offers zero interest rate duration but significant credit spread risk. IGBH holds long-dated, investment-grade corporate bonds, heavily weighted toward BBB/A credits, with a weighted average maturity of 22 years. Current BBB spreads are historically tight, increasing downside risk if spreads widen in a recession or risk-off event.

IGBH: Zero Duration Does Not Mean Zero Risk

IGBH Vs. IGLB: To Hedge Or Not To Hedge Long-Dated Bonds

I recommend a hold on iShares Interest Rate Hedged Long-Term Corporate Bond ETF and a buy on iShares 10+ Year Investment Grade Corporate Bond ETF. With anticipated Fed rate cuts in 2026, IGLB's unhedged duration exposure is positioned for outperformance versus IGBH's hedged approach. IGBH minimizes interest rate risk via swaps, but may underperform in a rate-easing environment due to negligible duration exposure.

IGBH Vs. IGLB: To Hedge Or Not To Hedge Long-Dated Bonds

Hyper Scale: AI's Massive Financing Needs In Focus

AI development requires large projects to establish computing power. That in turn requires massive amounts of financing.

Hyper Scale: AI's Massive Financing Needs In Focus

IGBH: Rate-Hedged Long-Term Corporate Bond ETF, Above-Average Yield And Returns

The iShares Interest Rate Hedged Long-Term Corporate Bond ETF is an interest rate hedged long-term corporate bond ETF, offering exposure to investment-grade bonds while minimizing rate risk. IGBH yields 6.3%, reasonably good for a high-quality bond ETF. Risks and drawdowns are somewhat reduced too. The fund is a solid long-term choice, although it should underperform if rates continue to decline.

IGBH: Rate-Hedged Long-Term Corporate Bond ETF, Above-Average Yield And Returns

IGBH: Long-Term Bond ETF With Near Zero Duration

iShares Interest Rate Hedged Long-Term Corporate Bond ETF (IGBH) offers interest rate risk mitigation by using swaps alongside a portfolio of long-term investment-grade bonds. The hedging strategy has worked very well, notably in 2022. Now upward pressure on rates has vanished, and it makes more sense to buy the non-hedged version, IGLB.

IGBH: Long-Term Bond ETF With Near Zero Duration

What's Going On With Treasury Rates?

We think the Fed has time to assess the impact of tariffs, and we expect it to wait to cut rates until the data show that tariffs are impacting the real economy. So far, there are no signs of recession in the hard data. The tariff pause offers the possibility to avoid worst-case economic scenarios before the damage is crystalized. We believe technical factors will continue to drive market dislocations in spreads and sectors, and that active managers can navigate this more effectively.

What's Going On With Treasury Rates?

IGBH: Rate-Hedged Investment-Grade Bond ETF, Strong 7.5% Yield

IGBH is an interest rate hedged investment-grade bond ETF. It has a strong 7.5% yield, and has outperformed most of its peers since inception. Although potential Fed cuts are a headwind, the fund trades with a sizable spread to its peers, so outperformance could continue.

IGBH: Rate-Hedged Investment-Grade Bond ETF, Strong 7.5% Yield

IGBH: Great Product But Late Cycle For It

iShares Interest Rate Hedged Long-Term Corporate Bond ETF is worth considering for hedging interest rate risk in a bond portfolio. IGBH mitigates interest rate risk and offers exposure to long-term corporate U.S. investment-grade bonds. The fund's holdings are concentrated in iShares 10+ Year Investment Grade Corporate Bond ETF and have significant exposure to the Consumer Non-Cyclical sector.

The Credit Opportunity In M&A

M&A was almost dormant in 2023. In the US, as a proportion of the market value of the benchmark equity indices, it fell to its lowest level in 20 years, according to McKinsey. Credit investors are not traditionally supposed to be fans of M&A, and it's true we are wary of leveraging M&A, where debt is loaded onto balance sheets to buy competitors. We are seeing a comeback for M&A that we think is likely to continue through 2024.

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