2024-03-30 00:52:14 ET
Summary
- Credit risk and bond durations are important considerations in the current economic environment.
- We think the iShares iBoxx $ Investment Grade Corporate Bond ETF offers safe credit exposure.
- Key metrics suggest the ETF's credit migration risk is stable, and its duration and convexity provide the potential for price gains.
- Lower dividend would not surprise us, but we think price gains will trump income-based headwinds.
- Buy Rating Assigned.
Credit risk and bond durations are serious topics of conversation these days, as a volatile economic environment has introduced a lot of uncertainty. We are proponents of onboarding credit risk for now; however, we recognize that some investors are on the lookout for credit exposure. As such, we dialed in on an asset that we think introduces safe credit exposure....
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For further details see:
LQD ETF: Unlock Assymetrical Duration Exposure