iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB)

IGSB's current yield reflects its credit risk, and the credit premium is already priced in, so the question is the tactical moment, also with CPI releases coming today. Employment data and labor market pressures are becoming central to the rate cut narrative as inflation looks more reasonable and the growth mandate becomes emphasised. The macro relationship between employment and credit spreads suggests an ambiguous picture despite duration benefit from possibly lower baseline rates.

Advisors don't want to take on much interest rate risk. But many are willing to take on some credit risk.

The equity market's volatility suggests a potential "Breakout" or "Breakdown," with a trade war with China likely causing significant market struggles. I recommend shifting some of your portfolio towards fixed income, particularly the iShares 1-5 Year Investment Grade Corporate Bond ETF, for its defensive characteristics. IGSB offers a low equity beta, low expense ratio, and a yield to maturity of 4.98%, making it ideal for capital preservation during market volatility.

Despite recent Fed rate cuts, a higher interest rate environment persists, making short/intermediate duration corporate credit like iShares 1-5 Year Investment Grade Corporate Bond ETF attractive for yield without excessive interest rate risk. The IGSB ETF offers exposure to U.S. dollar-denominated, investment-grade corporate bonds maturing in 1–5 years, providing a 4.56% yield with reduced interest rate risk. With a low 0.04% expense ratio and a diversified portfolio focused on financial institutions, IGSB stands out among short-term corporate bond ETFs.

Barron's Mid-Year 2024 Pro Picks revealed by panelists for potential investment opportunities. Barron's interviews of eleven financial industry Roundtable-pros tapped 48 predictions. Twelve non-ADR foreign stocks and six funds were dropped by YCharts screens, and six selections paid no dividends, leaving 24 in the final pool. The Barron's list tracked by YCharts as of 7/17/24 projected ten top analyst-estimated net gains from WST, ASML, PBR, RUSHA & topped by SLB ranging 19.46%-35.09%.

The U.S. Federal Reserve plans to slow its quantitative tightening program, indicating a potential interest rate pivot. However, the interest rate environment remains uncertain. The iShares 1-5 Year Investment Grade Corporate Bond ETF has a shorter duration and lower credit quality risk compared to the iShares 5-10 Year Investment Grade Corporate Bond ETF. The market outlook suggests ongoing interest rate uncertainty, making IGSB a more suitable choice for reducing duration.

Barron's First New-Year Roundtable, published 1/11/24, listed 8 stocks of note for 2024. The follow-up article published 1/22/24 mentioned 27 more and included a buy-recommendation from Andrew Bary for BP.

iShares 1-5 Year Investment Grade Corporate Bond ETF is a fixed income exchange traded fund. The vehicle focuses on corporate investment grade bonds with an overall low duration of 2.5 years. The market is pricing a risk-on environment with continued growth and low unemployment, leading to extremely low BBB bond credit spreads.

Barron's First New-Year Roundtable, published 1/11/24, listed 8 stocks of note for 2024. The follow-up article published 1/22/24 mentioned 27 more and included a buy-recommendation from Andrew Bary for BP. Barron's interviews of eleven financial-industry Roundtable-pros over those two-weeks tapped 35 predictions along-with the BP-feature. Four funds were missed by YCharts screen of active-stocks. Seven-selections paid no-dividends, leaving 23 in-the-pool. The combined Barron's two-part list tracked-by YCharts as of 2/8/24 projected ten-top analyst-estimated net-gains from ORCL, INTC RTX, GPN, DE, OSK, WTFC, FANG, BP & topped-by EG ranging 6.0%-27.58%.

While 2023 was the year of Fed rate hikes, the fixed income market is expecting 2024 to be the year of rate cuts. At the December 2023 meeting, the Federal Reserve's own guidance was for three 25 basis point reductions in 2024.

Wall Street witnessed an upbeat Q4 due to moderation in inflationary pressures, the likelihood of Fed rate cuts in 2024 and decent corporate earnings.

November to mid-December has been a great time for the capital markets. iShares 1-5 Year Investment Grade Corporate Bond ETF has lagged its brethren in terms of performance, thanks to its low duration. We examine the setup and tell you why Treasury Bills may be your best bet relative to the IGSB ETF.

During LSEG Lipper's fund-flows week that ended October 18, 2023, investors were overall net sellers of fund assets for the fourth week in five, removing a net $106.3 billion. Exchange-traded equity funds recorded $2.2 billion in weekly net inflows, the third straight week of attracting new capital.

During LSEG Lipper's fund-flows week that ended October 4, 2023, investors were overall net purchasers of fund assets for the first week in three, adding a net $32.9 billion. The Bloomberg U.S. Aggregate Bond Total Return Index logged its third straight weekly loss. Exchange-traded equity funds recorded $4.7 billion in weekly net inflows, marking the first weekly inflow in three.

Advisors have choices to face with their fixed income allocation. Should they take on credit risk to be rewarded with a high level of income?

The iShares 1-5 Year Investment Grade Corporate Bond ETF seeks to track an index of short-term investment-grade corporate bonds. The fund has a duration of 2.57 years and a collateral weighted average maturity of 2.96 years. Although Banking is the largest sectoral allocation, the probability of default is mitigated by the fund's granular build, with larger than 1% exposure only allocated to systemically important banks.