If you’d like to learn more, you can find the credit spread for a given fixed income fund in the “portfolio characteristics” section of each product page—it’s called the option adjusted spread or OAS.
In rising rate environments, credit spreads tend to move in the opposite direction to interest rates and can potentially generate income to help offset some of the impact of rising U.S. Treasury yields. As such, to prepare for rising rates, you may want to seek a potentially better balance of risk and reward by focusing on credit exposure. Exchange traded funds (ETFs) focusing on credit, such as the iShares 1-3 Year Credit Bond ETF (CSJ), can potentially help you do this.
While the coming rate rise cycle is likely to be gradual, you can begin to prepare your portfolios now, and continue this preparation over the coming months.
Heidi Richardson is a Global Investment Strategist at BlackRock. She is also Head of Investment Strategy for U.S. iShares.