Corporate bond exchange traded funds (ETFs) were favorites with investors last year, and this year looks like it might be even better.
At the height of the credit crisis in December 2008, companies had the disadvantage of having to pay about 1.5% more to lure U.S. investors to their bonds than borrowers seeking buyers elsewhere in the world.
That’s flip-flopped: now investors are demanding 1.66% more yield to hold U.S. investment-grade company debt instead of Treasuries, compared with an average 1.69% spread worldwide, reports Mike Shedlock for Fav Stocks. [Risk Easing In Corporate Bond ETFs.]
The shift is the result of growing confidence in the economic recovery. In fact, according to Bloomberg surveys, the U.S. economy is forecast to grow faster this year than Europe or Japan. [10 ETF Predictions for 2011.]