In the past few sessions despite the recent uptrend in equities, we have seen institutional accumulation of a reasonably conservative credit based ETF.
The iShares Barclays Intermediate Credit Bond (NYSEArca: CIU) has seen asset inflows to the tune of more than $700 million in recent sessions, which is equivalent to more than 15% of the assets outstanding in the fund.
The ETF has traded in a rather steady channel throughout 2012, finding support on multiple occasions on its 50 day moving average (currently $108.59, and the fund is trading above this level). CIU is based on the Barclays Capital Intermediate Credit Bond Index which invests in investment grade corporate and agency bonds. Furthermore, these specific bond issues must have remaining maturities of greater than one year, and less than ten years, thus, fitting in the “intermediate duration” category.
Currently, the fund has a 30 day SEC Yield of 2.30% and that likely appeals to those managers whom are uncomfortable still making aggressive equity allocations, but those who also don’t find current money market yields attractive. Additionally, fixed income issues such as longer term U.S. Treasury Bonds have been very volatile from a price standpoint recently, and that said, that may explain some of the appeal that CIU apparently has to institutional managers.
Top weightings in the fund are concentrated in the Industrials (41.55%) and Financials (26.61%) sectors presently, with lesser exposure to Utilities, Agency bonds, Supranationals, Sovereigns, and other categories. Since inception in January of 2007, CIU has climbed 8.77% and is within striking distance of it’s 2012 high of $109.16.
iShares Barclays Intermediate Credit Bond