iShares iBoxx $ Invest Grade Corp BondLQD

Morningstar Rating

ETF Research and Analysis

by Scott Burns
Suitability
IShares iBoxx $ Investment Grade Corp Bond LQD is a satellite fixed-income holding for an investor who is looking for investment-grade corporate-debt exposure with a medium-term duration. Investors holding this fund are generally looking   Read more 

Bull Case

This fund provides a low-cost means for investors to gain access to medium-duration, investment-grade corporate bonds.
Bond ETFs are extremely liquid with tight bid-ask spreads. Single bond issues, on the other hand, can prove illiquid and sport wide trading spreads.
The diversification offered by this fund will help shield investors from credit problems with any individual issuer. Read more 

Bear Case

While corporate spreads are still relatively high, nominal yields on corporate bonds are at the lower end of their historical range.
In 2008, disruptions to the credit markets made it hard for index providers to get accurate prices for the underlying holdings. As a result, bond ETFs saw unusual swings in the premium and discounts to their net asset values. Read more 

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