iShares iBoxx $ Investment Grade Corporate Bond ETF

LQD

Market cap $32.7B

REITs are poised for a strong comeback. Recent headwinds are now turning into tailwinds. Even then, high-quality REITs remain heavily discounted.

The Vanguard Long-Term Corporate Bond ETF and iShares iBoxx Investment Grade Corporate Bond ETF both offer exposure to investment-grade corporate bonds. VCLT offers lower costs and a higher yield, making it more appealing to income-focused investors.

SPLB and LQD both offer exposure to U.S. investment-grade corporate bonds. SPLB stands out for its lower fees and higher yield.

The market's obsessed with AI giants, leaving income investors behind. I'm focusing on what this imbalance means for long-term opportunity. Massive AI spending acts like new-age stimulus, creating ripples across power, infrastructure, and industrial sectors that fuel growth. I believe the Fed will keep "running it hot," driving new cycles in housing, manufacturing, and income assets as rates eventually fall.

The iShares iBoxx $ Investment Grade Corporate Bond ETF is not the lowest expense ratio option to target this particular duration. In addition to that, we are not terribly keen on long to very-long duration bonds. One of the issues we have, in addition to particularly low compensation for credit risk at the moment, is the low yield spread.

Investors have piled back into exchange-traded funds focused on investment-grade corporate bonds, amid a surging supply of new debt in that part of the fixed-income market.

As the Federal Reserve approaches next week's policy meeting, Wall Street is doing the usual pas de deux around interest rates. But this time, there is a disruptor to the traditional monetary policy logic: the unstoppable wave of ETF flows.

We think higher credit spreads are probable to occur and that the iShares iBoxx $ Investment could face residual backlash after higher yield bonds, especially given the vehicle's sector concentration. Unsecured bond exposure heightens risk due to higher loss given default. Moreover, lower rates are anticipated, which could trigger call risk and/or reinvestment risk. An effective duration of 7.99 can lead to upside if interest rates settle lower. That said, dislocations usually occur, where duration turns negative in stressed economic environments.

Insurance against Fed rate hikes with “rate-hedged” ETFs doesn't come cheap.

Rising tariff turmoil has sparked a run from credit-sensitive instruments, with escalating trade tensions threatening economic stability. Wednesday's GDP print stoked recessionary fears when it showed the U.S. economy contracted for the first time since early 2022.