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USIG - USIG: Corporate Bonds Are Not Appealing At Current Spread Levels
iShares Broad USD Investment Grade Corporate Bond ETF
2024-05-14 08:39:15 ET
Summary
The iShares Broad USD Investment Grade Corporate Bond ETF is a fixed-income ETF with $10.8 billion in AUM.
The fund primarily invests in single-A and triple-BBB corporate investment grade bonds.
Currently, interest rates (risk-free rates) are high but expected to stay that way due to inflation concerns. Credit spreads (risk premium) are conversely very tight, near historic lows.
Tight credit spreads are unsustainable and likely to widen in the future, while high inflation expectations are putting upward pressure on risk-free rates.
The fund comes with a 6.6-year duration, a 5.62% 30-day SEC yield, and a portfolio OAS of 86 bps.