The iShares iBoxx Investment Grade Corporate Bond Fund (NYSEArca: LQD) is the best-selling bond ETF in 2012 with over $5 billion of inflows as yield-hungry investors migrate to corporate debt.
LQD holds $23.8 billion in assets and offers a 12-month yield of 4%, according to manager BlackRock.
The bond ETF has hauled in $5.2 billion of inflows year to date through the end of July, according to ETF Industry Association data.
ETFs that track corporate high-yield or “junk” bonds have also been popular with investors on the hunt for yield. [Are High-Yield Bond ETFs in a Bubble?]
LQD has been a solid performer in 2012 with a total return of 7.7%, according to Morningstar. The bond ETF is lower for the month of August but has bounced at its 50-day simple moving average.
“High-quality corporate bonds offer relatively safe income and typically yield more than Treasury bonds because of their credit risk,” according to a Morningstar analyst report on LQD.
Although LQD is the largest corporate bond ETF, there are other options for the sector that are worthy of investor consideration, ETFdb reports.
iShares iBoxx Investment Grade Corporate Bond Fund
Full disclosure: Tom Lydon’s clients own LQD.