Debate remains regarding exactly when the Fed will raise interest rates as slack household spending and stagnant wage growth could put rate hikes on the back burner for the foreseeable future. However, even if rates do rise next year, BOND’s ability to pare Treasury exposure and its heavy tilt toward investment-grade company debt could help the ETF remain durable because funds with lower durations and robust high-grade corporate exposure can outpace broader fixed income indices in a rising interest rate environment when the economy is expanding. [Advantages of Corporate Bond ETFs]
With nearly $3.6 billion in assets under management, BOND is the second-largest actively managed ETF behind the PIMCO Enhanced Short Maturity ETF (NYSEArca: MINT).
PIMCO Total Return ETF
Tom Lydon’s clients own shares of LQD.