ETF Spotlight on the iShares Intermediate Credit Bond Fund (NYSEArca: CIU), part of an ongoing series.
Assets: $6.2 billion.
Objective: The iShares Barclays Intermediate Credit Bond Fund tries to reflect the performance of the Barclays U.S. Intermediate Credit Bond Index, which is comprised of investment grade corporate debt and sovereign, supranational, local authority and non-U.S. agency bonds with maturities between 1 and 10 years.
Holdings: Top holdings include BlackRock FDS 0.6%, European Investment Bank 4/15/2016 maturity 0.4%, KFW 1/17/2023 maturity 0.3%, Bank of America 1/11/2023 maturity 0.3%and Goldman Sachs Group 1/22/2018 maturity 0.3%.
What You Should Know:
- BlackRock’s iShares sponsors the fund.
- CIU has a 0.20% expense ratio.
- The fund has 2,777 holdings and the top ten make up 3.2% of the overall portfolio.
- The ETF has an effective duration of 4.30 years – the effective duration is a measure of sensitivity to interest rate changes.
- CIU has a 1.57% 30-day SEC yield.
- Allocations include industrial 43.1%, financial institutions 27.1%, utilities 7.4%, supranational 6.7%, agencies 6.1%, sovereign 3.1%, financial 2.5% and local authorities 2.0%.
- Credit quality breakdown includes AAA 10.0%, AA+ 3.1%, AA 3.5%, AA- 6.1%, A+ 9.3%, A 12.6%, A- 20.5%, BBB+ 15.4%, BBB- 7.1%, BB+ 1.2% and BB 0.1%.
- The fund is down 1.3% over the past month, down 0.2% over the last three months and down 0.1% year-to-date.
- “Tactical investors could employ this fund when they feel the corporate-bond market is underpriced versus Treasuries,” according to Morningstar analyst Timothy Srauts.
- “Unlike most other corporate-focused ETFs, CIU has a wider mandate that includes a 20% allocation to noncorporate entities,” Strauts added. “This more diverse profile may be attractive to investors looking for additional diversification.”
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