“Investors holding this fund are generally looking for a relatively safe and consistent income stream,” Morningstar analyst Timothy Strauts writes in a profile of the ETF.
Of course, the bond fund could be hit by rising interest rates and increasing corporate credit spreads.
Finally, investors worried about a recession would want to reduce their exposure to commodities, Koesterich says.
“Commodities tend to be particularly sensitive to economic activity so investors who expect a double dip may want to consider lowering their commodity allocation,” the strategist wrote at the iShares blog. “The commodities to curb back on: Those most tied to economic activity, such as industrial metals, agricultural commodities and energy.” [Copper, Oil ETFs Fall on Growth Concerns]