Investment-grade corporate bond exchange traded funds could maintain their momentum on improving fundamentals.
Year-to-date, the iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSEArca: LQD) gained 5.8%, Vanguard Intermediate-Term Corporate Bond ETF (NYSEArca: VCIT) rose 4.9% and SPDR Barclays Intermediate Term Corporate Bond ETF (NYSEArca: ITR) advanced 3.5%.
The corporate debt market may continue to strengthen as new issuances peter out and yield-starved foreign investors jump into U.S. markets.
While global issuance of non-financial company debt will be in excess of $236 billion by the end of May, the new supply won’t be able to meet investor demand as easy-money monetary policies push yields on over $9 trillion of bonds worldwide below zero, Bloomberg reported.[related_stories]