Credit risk is not a primary concern with CIU as roughly 58% of the ETF’s holdings are rated A- or higher by Standard & Poor’s. CIU is not a pure corporate bond ETF because it can allocate up to 20% of its weight to non-corporate issuers.
For example, super national issues from the International Bank for Reconstruction and sovereign from Turkey, among others, are found among the ETF’s holdings. [Spotlight on Intermediate Credit Bonds]
“Overall, S&P Capital IQ believes that iShares Intermediate Credit Bond ETF offers a favorable combination of risk-reward characteristics and warrants a look from investors who ascribe to the consensus view that while Fed tapering will continue, bond yields will remain in a tight range in the near term,” added Rosenbluth.
iShares Intermediate Credit Bond ETF
Tom Lydon’s clients own shares of TLT.