WisdomTree U.S. Corporate Bond Fund

QIG

Market cap $18M

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

Even with the Federal Reserve not yet obliging bond investors with a 2025 interest rate cut, corporate bonds have been solid performers. Alone, that could be enough motivation for some investors to examine the asset class.

By Vanya Sharma, Senior Associate, Capital Markets Key Takeaways As equity markets remain volatile, WisdomTree's fixed income ETFs—like AGGY and SHAG—offer investors a way to anchor portfolios with higher-yielding, investment-grade exposure while managing interest rate risk.

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.

Corporate bonds and the related exchange traded funds have traded lower over the past month. Some market observers pinpoint culprits in the form of President-elect Trump's tariff talk, and the possibility that the incoming administration will employ economic policy that's inflationary.

Economic data indicates the U.S. economy is on solid footing. But the post-mortem on the 2024 presidential election tells a different story.

Three months of discouraging inflation data coupled with some hot economic data points are considered headwinds for U.S. Treasurys because both scenarios indicate rate cuts by the Federal Reserve aren't as imminent as previously expected. On the other hand, some market observers argue the case for corporate credit, particularly investment-grade fare, remains sturdy.

It's unknown when the Federal Reserve will trim interest rates. It's also unknown how many times the central bank will do so this year.