Right now, you don't get paid much extra to go out on the maturity spectrum. DIA specializes in creating custom fixed income portfolios with a core of individually selected bonds, preferred stock, exchange traded debt and other income focused investments. In this report, we discuss how we are investing today to mitigate risk and lock in yields that we don't expect to last. When rates come back down (again, not likely for at least a year), you will wish you owned long-dated high-quality corporate and municipal bonds. The last time the index fell to the current level was in the 2008-09 period when it seemed like the global financial system was coming apart. The BofA Merrill Lynch Option-Adjusted Spread (or OAS) measures the average difference in yields between investment-grade bonds and Treasuries. While we cannot predict where markets and rates are headed next (and after 30 years of professional investing we have learned that no one else can either), it appears to us that now may be a once in several decades opportunity to consider this asset class, and the window of opportunity to take advantage may last for much less time than might appear. Percent, Daily, Not . "Invesco Government & Agency Portfolio. It's been a mixed bag for corporate bond investments this year. As such, investment-grade bonds will always provide a lower yield than non-investment grade bonds. Below is the screenshot from Fidelity's bond research center of new corporate issues. ", VettaFi. See long-term Moody's Seasoned Baa Corporate Bond Yield charts and . SEC 30-day yield is a standard yield calculation developed by the SEC that allows for fairer comparisons of bond funds. Remember, we need to balance the maturities. The month of October saw 73% of dollar bonds in our universe delivering a negative price return (ex-coupon). That meant yields on safe investments paid next to nothing. Below we have the iShares iBoxx Investment Grade Bond ETF (LQD) and below that, the US Corporate BBB Effective Yield. Realty Income Corp (O), 3.0% of 1/15/2027, offered at 90, yield-to-maturity of 5.7% (CUSIP 756109AS3, rated A3/A-). These are the leverage vehicles for the underlying common shares of the BDC. This gives the investor the look and feel of an individual bond, but with the ease of purchasing and selling an exchange-traded security. It may be a generational opportunity to lock in low risk, high yielding bonds; last opportunity was a short window in 2008-09. Yes, you only get an extra 50 bps to go out 6 additional years - and accept all the interest rate risk that comes with it. If the coupon rate is less than the yield required by the market, the price of the bond is . Percent, Not Seasonally Adjusted. All information for an index prior to its Launch Date is hypothetical back-tested, not actual performance, based on the index methodology in effect on the Launch Date. Please refer to the disclaimers here for more information about S&P Dow Jones Indices' relationship to such third party product offerings. I am not receiving compensation for it (other than from Seeking Alpha). The fixed income market aligns itself into three broad buckets: the traditional risk-off assets (such as treasuries and agency MBS), bendable assets (such as investment grade corporates and senior non-agency MBS), and breakable assets (such as high yield and EMD). Yield-to-maturities are 4.5% to 7.4%. As inflation has moved higher, or not subsided nearly as fast as expected, the terminal rate has adjusted up. The best investment grade corporate bond ETFs for the Q4 2022 are BSCN, IBDN, and BSCM. The distinction between risk-off and risk-on assets is widely understood. ", VettaFi. This bond trades at a slight premium in contrast to the prior ideas. Corporate Bonds: Displays the range of rates for Corporate Bonds; Bond Type YTM (%) Investment Grade: 3.10% to 5.50%: Investment-grade bonds are those with a rating of AAA to BBB or Aaa to Baa2 by Moody's. If bonds are also insured as to the timely payment of principal and interest, no representation is made as to the insurer's ability to meet . I am not receiving compensation for it (other than from Seeking Alpha). Three-Month Average Daily Volume: 591,880, Three-Month Average Daily Volume: 329,173, Three-Month Average Daily Volume: 582,808. In other words, breakable assets will act more like stocks with large downside moves. 88 ETFs are placed in the High Yield Bonds Category. Remember, BBB is the lowest rung on the investment grade credit rating ladder. You can easily build a bond ladder with these tools. As yields trended lower over the last decade, investment grade bonds have offered investors reasonable yield of approximately 3%, relatively low risk of principal loss, and attractive total returns of just over 5% annualized. Closing index values, return on investment and yields paid to investors compared with 52-week highs and lows for different types of bonds . NYSEARCA:LQD, iShares Investment Grade Corporate Bond ETF). ET the following business day. For example, an investor may demand a yield of 3% for a 10-year bond rated AAA (investment-grade) due to the extremely . The range of this spread is an indicator of the market's belief in the stability of the economy. Please be aware that Downtown Investment Advisory currently holds the bonds noted in this article in client and personal accounts, and may have added/will add to positions at any time prior to or following the publication of this article. Jill Hirzel, investment specialist at Insight Investment, surveys the euro investment grade bond space in light of higher inflation, rising interest rates and slowing economies. Time to take advantage of that by LOCKING IN some yield for the next several years. In this way, we know exactly when our principal will be repaid in full and exactly the income earned from the bond portfolio. Broad Market Bloomberg Fixed Income Indices, U.S. Corporate Indexes Bloomberg Fixed Income Indices, U.S. Agency Indexes Bloomberg Fixed Income Indices, Mortgage-Backed Bloomberg Fixed Income Indices, U.S. Corporate Debt S&P Dow Jones Indices. Non-investment grade bonds offer higher yields . DIA provides customized investment advisory services to individuals, charitable institutions and retirement plans. A bond ladder is a portfolio of fixed-income securities with different maturity dates. Note that with the current yield curve, which envisions yields coming down in the future, going out farther in duration is not necessarily providing higher yields to bond investors and in some cases is lower. We think moving up quality and into an individual structure over a CEF makes sense as the Fed raises rates. If the current yield is higher than the coupon rate, investors would want a higher return on their investment. These followers have not been solicited by DIA, and the presence of these followers should not be considered testimonials or advertisements for DIA's investment management services.Important disclaimer language for all articles published on Seeking Alpha:All articles and comments published by DIA are intended as an information source for investors capable of making their own investment decisions. But with investment grade bonds this possibility is extremely low based on historical data, and with bond selection and portfolio diversity, this risk can be even further mitigated. This has resulted in what we believe to be a potentially generational opportunity to lock in excellent yields in the lowest risk corporate bonds, those rated investment grade. Some bonds to consider today: Bank of America (BAC), 6.0% of 10/20/2027, offered at par 100, yield-to-maturity of 6.0% (CUSIP 06048WZ29 , rated A2/A-). (The inverse is true for total returns when interest rates decline. These bonds tend to be issued at lower yields than less creditworthy bonds. Corporate bonds are a good place to pick up yield in the bond market. The S&P 500 Investment Grade Corporate Bond Index, a subindex of the S&P 500 Bond Index, seeks to measure the performance of U.S. corporate debt issued by constituents in the S&P 500 with an investment-grade rating. Please send us your feedback via our. Investment-grade bond: A bond typically issued by governments or companies perceived to have a relatively low risk of defaulting on their payments. Corporate bonds of financial, information technology, and healthcare companies receive the largest allocations within the fund. Yields on investment-grade corporate bonds, according to the BofA Merrill Lynch US Corporate Master Effective Yield, fell to a low of 2.84% by mid-April. "Invesco BulletShares 2022 Corporate Bond ETF (BSCM). Note that many investment grade bonds are trading at large discounts to face value, since they were issued when yields were much lower, and the market move to adjust these yields to current market conditions means the bond price must fall. Investment grade bond yields are on par with S&P 500 forward earnings yield for the first time in 20 years, suggesting credit outperformance over the medium term," according to Bank of America. The two-year treasury note now yields 4.5%. Bonds rated Baa and above are considered investment grade. Despite best efforts to provide quality investment information to our readers, DIA does not accept any liability or responsibility for any loss resulting from investment decisions based on information in any article or comment. My analysis is meant to provide safe and actionable insight without the fluff or risky ideas of most other letters. You can find out more about our use, change your default settings, and withdraw your consent at any time with effect for the future by visiting Cookies Settings, which can also be found in the footer of the site. We continue to favor long duration, low dollar price corporates for . The offers that appear in this table are from partnerships from which Investopedia receives compensation. NOTES. In other words, the market believes that it will take more and more restrictive monetary policy to get inflation under control. We recommend a portfolio of individual bonds. (This is the first part of a series we have started on our service, Yield Hunting.). ", Invesco. Invesco. That includes a barbell approach where we look at some near-term maturities/call bonds as well as some long-term bonds that will not mature for at least 7 years. Therefore, no reader should assume that any articles or comments published on Seeking Alpha is a substitute for individual personalized advice from an investment professional of the readers choosing. I have no business relationship with any company whose stock is mentioned in this article. Different agencies use different variations for credit ratings. As of this writing, the 10-year treasury bond yield sits at just below 4.0%, up from 1.8% at the start of 2022. Preliminary data and data shown as "n.a." I wrote this article myself, and it expresses my own opinions. When rates are up like they are now, we want to lock in some of that for as long a time as we can. 1) BDC Notes. The higher quality of these bonds is reflected in their higher credit ratings when compared with bonds thought to have a higher risk of default, such as high-yield bonds. Investment-grade bonds are issued by companies that are highly solvent, while high-yield bonds indicate that their issuers have a lower credit rating, due to a number of factors, including weaker competitive position in the sector, smaller . Any opinions or estimates constitute the author's best judgment as of the date of publication, and are subject to change without notice. Although an economic slowdown may negatively impact all corporations, investment-grade corporate bonds should be better positioned than high-yield bonds in case market volatility does pick up. I have no business relationship with any company whose stock is mentioned in this article. The fund uses a "sampling" methodology to invest in at least 80% of corporate bonds that comprise the index. The bond's current yield is 6.7% ($1,200 annual interest / $18,000 x 100). Main Street Capital (MAIN), 3.0% of 7/14/2026, offered at about 85.1, yield-to-maturity of 7.7% (CUSIP 56035LAE4, rated BBB-). The best-performing investment grade corporate bond ETF, based on performance over the past year, is the Invesco BulletShares 2023 Corporate Bond ETF (BSCN). 2. Risk Tolerance and Example, iShares iBonds Dec 2022 Term Corporate ETF (IBDN), iShares iBonds Dec 2022 Term Corporate ETF (IBDN). Similarly, Moody's investment-grade uses a mix of capital letters and small letters. A target-date fund is a fund offered by an investment company that seeks to grow assets over a specified period of time for a targeted goal. Exchange-traded funds (ETFs) are not reserved solely for equities. For example, Ares Capital (ARCC) has 9 individual issues with maturities ranging from Jan 2023 to Aug 2031. BSCM is also a BulletShares fund, which means that it distributes the principal back to investors once its scheduled maturity date is reached. This subset includes all securities with a given investment grade rating BBB . However, this information is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. However, if a year from now, rates come down hard, then that longer-dated option will bounce much harder because of the longer duration. I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or adopt any investment strategy. . The Fed will likely continue to tighten into next year but we think the market is pricing a lot of that in right now with that 5.0% terminal rate. Bloomberg Fixed Income Indices data are preliminary. High yield bonds typically offer higher returns, but with more risk, because the issuers are considered to have a greater chance of default. Corporate bonds can receive ratings that range from a high of Aaa to a low of C. Bonds given the Baa rating are considered as medium-grade obligations, meaning they are neither highly protected nor poorly secured. For those that do not like or want to invest in individual bonds, the use of BulletShares (from Invesco) and iBonds (from Blackrock) is an easy alternative. The result: "Investment-grade corporate yields and spreads are at multiyear highs, and the yields on high-yield debt now average 9.5%," said AllianceBernstein. Investment-grade corporate bond yields took cues from the Treasury securities and rose as well. They are not a guarantee of credit quality, probability of default, or recommendation to buy or sell. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. The S&P Eurozone Investment Grade Corporate Bond Index seeks to track the performance of debt issued by any investment-grade . But for new monies or investors that seek to shift away from the stock market, we see the current market for investment grade bonds as a unique opportunity to lock in 6%-7%+ annual returns with the safety of the highest credit quality corporate bonds. Yields and prices have an inverted relationship, with one . You can learn more about the standards we follow in producing accurate, unbiased content in our. High-yield pertains to bonds rated Ba1/BB+ and lower. Nathan Reiff has been writing expert articles and news about financial topics such as investing and trading, cryptocurrency, ETFs, and alternative investments on Investopedia since 2016. * Downtown Investment Advisory is the "doing business as" name of Maytal Asset Management LLC. Beyond cash, the second and third top holdings of the fund consist of two distinct sets of bonds issued by AbbVie. That means they're rated below Baa (by Moody's) or BBB (by S&P and Fitch). We think now is the time to start 'locking in yields' for the next couple of years. It is due to investors demanding a higher yield to compensate for the higher credit risk in holding non-investment-grade bonds. Investment-grade bond yields rose in the week ending November 13 after Federal Reserve officials commented on the possibility of a rate hike in December. Investment Grade And High Yield Bonds. I wrote this article myself, and it expresses my own opinions. A year ago, the note barely yielded 0.3%. Yields have soared along with market interest rates, to ~6% in some investment grade bond indexes and funds. "Invesco BulletShares 2023 Corporate Bond ETF (BSCN). 0.44% Average 1YR Return-6.50% . Is this happening to you frequently? The views and strategies described in our content may not be suitable for all investors. The PGIM High Yield Bond Fund is a no-frills closed-end fund focused on non-investment grade bonds. Read how to use bond ladders to create steady cash flow. Bonds having low credit quality ratings (BB, B, CCC, etc.) Today, we want to avoid breakables. This compensation may impact how and where listings appear. Tracking Bond Benchmarks Friday, December 09, 2022. The investment grade corporate bond sector underperformed the broad U.S. equity market over the past year. We see several attractive opportunities in large cap, investment grade BDC bonds in addition to Main Street, with yields in the 7%-8% range. What you should have is really up to you but the risk-return dynamics of this area of the market cannot be understated! Vanguard Interm-Term Corp Bd ETF. Moody's, Standard & Poor's, and Fitch append their ratings with an indicator to show a bond's . Bonds with a rating of BBB- (on the Standard & Poor's and Fitch scale) or Baa3 (on Moody's) or better are considered "investment-grade." Bonds with lower ratings are considered "speculative" and often referred to as "high-yield" or "junk" bonds. These securities have unique attributes: Both companies have investment grade, high yield, and muni options. For example, some Bank of America bonds maturing in 2034 and 2036 are yielding 5.6%-5.7%. When you visit the site, Dotdash Meredith and its partners may store or retrieve information on your browser, mostly in the form of cookies. 86% of all Investment Grade (IG) dollar bonds in our universe ended the month in the red, while High Yield (HY) outperformed with 50% in the green. "iShares iBonds Dec 2022 Term Corporate ETF (IBDN). One solution to uncertain market returns and volatility, at least as it relates for new monies available for investment, is to lock in attractive yields in investment grade bonds for the next 4 to 7 years. There are investment-grade corporate bonds, junk bonds, foreign corporate bonds, hybrid corporate bonds, and [] Of course, they are not frictionless as there are some fees and other costs that would reduce overall total returns. The top corporate bond holdings of IBDN include those issued by AbbVie Inc. (ABBV), a biopharmaceutical company; Visa Inc. (V), the financial services company; and Sumitomo Mitsui Financial Group Inc. (SMFG), the Japan-based multinational banking and financial services company. The current market environment can be characterized as one with significant future risks. Given the headwinds to CEFs in this environment, we are still maintaining an underweight to CEFs and putting that capital into high-quality, investment grade, individual bonds. If you are interested in learning about closed-end funds and want guidance on generating income, check out our service today. We also have expert guidance on individual preferred stocks, ETFs, and mutual funds. This includes 23 corporate bonds rated "buy" and 21 bonds rated "hold." BondSavvy recommends high yield corporate bonds and investment grade corporate bonds each quarter on a subscriber webcast called The Bondcast. It was a surprise that investment-grade . The top corporate bond holdings of BSCN include those issued by Apple Inc. (AAPL), which sells personal computers, mobile devices, and services; Bank of America Corp. (BAC), a diversified financial services company; and The Boeing Co. (BA), an aerospace company serving the defense, commercial and aerospace markets. The fund's maturity year is 2022 and it will terminate on or around Dec. 15, 2022. It reflects dividends and interest ("income") earned during the most recent 30-day period after the deduction of the fund's expenses and is calculated by . The highest quality corporate bonds are down more than 20% in 2022. Bloomberg corporate indexes may be unavailable until midday the following business day. If a bond as a AAA rating, then agencies have given it the highest quality rating. IBDN seeks to track the Bloomberg December 2022 Maturity Corporate Index, which is comprised of U.S. dollar-denominated, investment grade corporate bonds maturing in 2022. This has resulted in what we believe to be a potentially generational opportunity to lock in excellent yields in the lowest risk corporate bonds, those rated investment grade. In the interim, interest earned can be reinvested in new bonds to benefit from compounding interest. iShares Broad USD Invm Grd Corp Bd ETF. All numbers are as of Aug. 18, 2022. The higher these investment-grade spreads (or risk premiums) are, the weaker the economy is considered. SPDR Portfolio Corporate Bond ETF. Rating agencies have systems for rating bonds as investment grade or non-investment grade. * Constrained indexes limit individual issuer concentrations to 2%; the High Yield 100 are the 100 largest bonds, In local currency Euro-zone bonds. iShares ESG USD Corporate Bond ETF. No index-linked product details are currently available. Developments in Greece impact yields Greece deferred its first pending payment on June 5. Please see the Downtown Investment Advisory profile page for important disclaimer language, which is an integral part of this article. Not someone from another career doing this on the side. DIA does not get paid or receive compensation of any kind by any company or any third party for discussing a particular company or investment in any article. Listed below are some specific bonds that we have added to client portfolios recently. There are also bond ETFs that invest exclusively in fixed-income securities. During the financial crisis in 2008-2009, the spread between Aaa and Baa bonds widened because of the unpredictability of bonds and increased default rates. Get our latest research and insights in your inbox. Aug 25, 2021. We highlight a bunch of individual bonds but for those that do not like buying individual bonds (most investors have never done so but it has become much easier than in years past), we highlight ETF alternatives like BulletShares defined maturity ETFs. The S&P 500 Bond Index is designed to be a corporate-bond counterpart to the S&P 500, which is widely regarded as the best single gauge of large-cap U.S. equities. "Invesco BulletShares 2022 Corporate Bond ETF (BSCM).". My goal is to provide a relatively safer income stream with CEFs and mutual funds. Preliminary data and data shown as "n.a." Until the . It is time to start nibbling on these issues and reducing risk while increasing overall portfolio yield. We also reference original research from other reputable publishers where appropriate. I have no business relationship with any company whose stock is mentioned in this article. Right now, between individual corporate bonds and BDC notes, my portfolio is now weighted nearly 35% to this bucket. I wrote this article myself, and it expresses my own opinions. The best investment grade corporate bond ETFs for the Q4 2022 are BSCN, IBDN, and BSCM . While investing in the index or other bond ETFs is a reasonable move, our preference is to hold individual bonds that have a known maturity date and known yield. We also help investors learn about investing and how to properly construct a portfolio. The chart below shows the sharp decline in the LQD index fund this year and comparison to prior decades. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. These include white papers, government data, original reporting, and interviews with industry experts. will update around 12p.m. by Amruth Sundarkumar | Nov 1, 2022 | High Yield Bonds, Insights, Investment Grade Bonds. Kinder Morgan (KMI), 7.0% of 10/15/2028, offered at about 102.8, yield-to-maturity of 6.4% (CUSIP 880451AV1, rated BBB/Baa2; note that these bonds may be listed under the original issuing entity which was later acquired by Kinder Morgan, called Tennessee Gas Pipeline Co.). When the investment horizon is longer than the bond's duration, however, higher yields on reinvested cash flow outweigh the market price decline. Examples of the kinds of companies whose bonds are included in these ETFs include Verizon Communications Inc. (VZ), Goldman Sachs Group Inc. (GS), and Wells Fargo & Co. (WFC). A high-yield bond can be upgraded into the investment-grade category ("rising star"), as an investment-grade bond can also be downgraded to a junk bond ("falling angel"). A year ago, you produced maybe $6,000. iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD). Moody's Seasoned Aaa Corporate Bond Yield . These are ETFs that liquidate at a certain date in the future and hold bonds that mature around that date. For existing bond holders, there is not much that can be done, all fixed income portfolios have declined in value this year. ", VettaFi. The ETF provides exposure to investment grade corporate bonds with maturities between Jan. 1, 2022 and Dec. 15, 2022. That wasn't even achievable in half of the high yield market previously. ", Invesco. It considers that you can achieve compounding interest by reinvesting the $1,200 you receive each year. There are 67 distinct investment grade corporate bond ETFs that trade in the U.S., excluding inverse and leveraged ETFs as well as funds with less than $50 million inassets under management (AUM). "iShares iBonds Dec 2022 Term Corporate ETF (IBDN). In times of economic stress, defaults may spike, making the asset class more sensitive to the economic outlook than other sectors of the bond market. The market has been terrible this year at forecasting this rate. In this report, we discuss how we are investing today to mitigate risk and lock in yields that we don't expect to last. Unless the current level of income is the most important factor, this should not matter to an investor, as the yield-to-maturity metric is the key indicator of annualized yield taking into account all factors. An investment grade bond is a bond that has a credit rating of BBB or higher, according to the Standard & Poor credit rating system. the consensus looks like they will be right where a recession is highly likely and expected by the majority. But make sure you think about this correctly. 1) Alpha Gen Capital - I am a former financial advisor and investor. Over a period of 15, 20, or 25 years, interest rate rises of 100 and 200 basis points result in an improvement in total returns. Criticism. The market has been operating in an orderly fashion, but spreads will likely remain under pressure throughout the fourth quarter. Investment grade corporate bonds are now paying 5.50% to 6.50%, something we haven't seen for more than 15 years. In other words, for the same bond purchased a year ago, you are generating 900% more income. These higher quality bonds generally have a lower yield than non-investment grade or non-rated securities because they are considered more likely to make all of their scheduled interest payments. Many investment grade-rated businesses spent parts of 2020 and last year buying back older, more expensive debt and selling long-dated bonds with low coupon rates, often going out 10, 20 and even . Instead, we need to overweight defensive and 'bendable' assets. Outflows were the third highest on record. Invesco BulletShares 2023 Corporate Bond ETF (BSCN), iShares iBonds Dec. 2022 Term Corporate ETF (IBDN), Invesco BulletShares 2022 Corporate Bond ETF (BSCM), Best Investment Grade Corporate Bond ETFs for Q4 2022, Two Copper ETFs Offer Broad Exposure as the Metal Rebounds, Best (and Only) Inverse Oil ETF for Q4 2022, Best (and Only) Inverse VIX ETF for Q4 2022, The Bond Market (aka Debt Market): Everything You Need to Know, Benchmark: What It Is, Types, and How to Use Them in Investing, What Is a Target-Date Fund? The S&P 500 Bond Index is designed to be a corporate-bond counterpart to the S&P 500, which is widely regarded as the best single gauge of large-cap U.S. equities. But that needs to be weighed with the ease of use. These ETFs invest in junk bonds, senior loans, as well as international below investment grade debt. Kinder Morgan is one of the largest natural gas pipeline companies with a $38 billion market cap. A year ago, our taxable CEFs barely yielded these levels with 35% leverage and a 5% discount. The terminal rate - or the expected highest rate that the Fed moves rates to - is now approaching 5.0%. It has a current 10.0% distribution yield. This has produced the prospect for investors to secure high returns on corporate bond investments that weren't available in previous years. Corporate bonds of financials, healthcare, and consumer discretionary companies receive the largest sector allocations within the portfolio. at just below 4.0%, up from 1.8% at the start of 2022. View or download the latest data for bond yields, marketable bond average yields and selected benchmark bond yields. Investment-grade bond yields appear attractive around these levels, but macroeconomic uncertainty will continue to create volatility for spreads. iShares, from Blackrock, and BulletShares from Invesco, offer up defined maturity bond ETFs. Readers do not receive investment advisory, investment supervisory or investment management services, nor the initial or ongoing review or monitoring of the readers individual investment portfolio or individual particular needs. Bendable assets will decline but far less than stocks and breakable assets. Please. This steep rise has led to a decline in all classes of fixed income, with the highest quality corporate bond indexes down over 20% this year (e.g. The Core Income Portfolio currently yields over 8% comprised of closed-end funds. There is no need to recount the market turmoil in 2022, higher inflation and the sharp rise in interest rates as a result of Fed moves and market action. Closing index values, return on investment and yields paid to investors compared with 52-week highs and lows for different types of bonds. Almost half of the entire investment grade corporate bond space is BBB-rated. With our macro outlook, we think being underweight equities and CEFs in your portfolios makes sense. Data available as: CSV, JSON and XML. I am not receiving compensation for it (other than from Seeking Alpha). Access selected data on treasury bill yields. The index Launch Date is Mar 07, 2016. Real-World Examples of High-Yield Bonds. The month of August was a tale of two divergent performances - 80% of all Investment Grade (IG) dollar bonds in our universe ended the month in the red and in contrast, 58% of High Yield (HY) ended the month higher. A breakable asset is one whose valuation suddenly transitions from going concern value to workout value. , iShares Investment Grade Corporate Bond ETF). Follow BDC Buzz for the best research on these notes on the planet. So if we look at the global investment grade corporate bond market right now (November 2018), spreads are around 1.2%. As a result, these companies pay higher coupons . The bond market is the collective name given to all trades and issues of debt securities. Please. Yields have soared along with market interest rates, to ~6% in some investment grade bond indexes and funds. BulletShares funds are unique in that they distribute principal back to investors once the scheduled maturity date is reached. This data represents the effective yield of the ICE BofA BBB US Corporate Index, a subset of the ICE BofA US Corporate Master Index tracking the performance of US dollar denominated investment grade rated corporate debt publicly issued in the US domestic market. Please disable your ad-blocker and refresh. (1) Ares Capital - (ARCC) 2.15% 2026 (04010LBA0) YTM: 7.0%, (2) PennantPark - (PNNT) 4.00% 2026 (708062AD6) YTM: 9.0%**, (3) Golub - (GBDC) 2.50% 2026 (38173MAC6) YTM: 7.2%, (4) Owl Rock - (ORCC) 2.625% 2026 (69121KAF1) YTM: 7.9%, (5) Hercules Cap - (HTGC) 3.375% 2026 (427096AH5) YTM: 7.8%, (6) Ares Capital - (ARCC) 3.875% 2025 (04010LAZ6) YTM: 6.9%, (7) Ares Capital - (ARCC) 2.875% 2028 (04010LAZ6) YTM: 7.4%, (8) Owl Rock - (ORCC) 2.875% 2028 (69121KAG9) YTM: 8.1%, (9) Main Capital - (MAIN) 3.0% 2026 (56035LAE4) YTM: 7.6%, (1) Goldman Sachs - (GS) 5.0% 2025 BBB+ CUSIP: 38150APA7, (2) Dow Chemical - (DOW) 5.4% 2027 BBB CUSIP: 26054MAR2, (3) TD Bank Step-Up - (TD) 6.0% 2028 A CUSIP: 89114X4B6, - From 10/17/2022 10/17/2025 Coupon will be 6.00%, - From 10/18/2025 10/17/2028 Coupon will be 6.25% if not called, (4) Citigroup Global - (C) 5.25% 2024 A+ CUSIP: 17330RHB4, (5) TD Bank Step-Up - (TD) 5.5% 2025 A CUSIP: 89114X4A8, - From 10/17/2022 10/17/2024 Coupon will be 5.50%, -From 10/18/2024 04/17/2025 Coupon will be 5.75% if not called, -From 04/17/2025 10/17/2025 Coupon will be 6.25% if not called, (6) TD Fixed Coupon - (TD) 6.0% 2026 A CUSIP: 89114X4N0. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. will update around 12p.m. One solution to uncertain market returns and volatility, at least as it relates for new monies available for investment, is to lock in attractive yields in investment grade bonds for the next 4 to 7 years. This is why we are in favor of purchasing these investments today. I am not receiving compensation for it (other than from Seeking Alpha). Spirit Realty (SRC), 3.2% of 1/15/2027, offered at about 87.3, yield-to-maturity of 6.7% (CUSIP 84861TAE8, rated BBB/Baa2). Some analysts believe the next 10 years could be another "lost decade" for stocks where stock indexes bounce around, but in the end offer little return over this period of time. Our Yield Hunting marketplace service is currently offering, for a limited time only, free trials and 20% off the introductory rate.. Another important way to analyze bond yields is spreads between different kinds of bonds. Corporate debt with investment-grade ratings feature lower yields . Get updated data about global government bonds. "Invesco BulletShares 2023 Corporate Bond ETF (BSCN). For those that do not like buying individual bonds, investors can use ibonds from BlackRock or BulletShares from Invesco. 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