While the Federal Reserve has stopped implementing accommodative measures, global central banks, like the European Central Bank and the Bank of Japan, have expanded their quantitative easing programs, pushing yields on their government debt into the negatives, which made U.S. bonds a relative bargain.
The yield on 10-year Japanese government bonds fell to a record low of negative -0.275% Wednesday, and yields on Japan’s 20-year government bonds fell below zero for the first time ever.
With expanded QE measures from global central banks and potentially more to come in a post-Brexit environment, foreign investors may continue to dive into higher yielding U.S. assets, like investment-grade corporate bonds.
For more information on the fixed-income market, visit our bond ETFs category.
iShares iBoxx $ Investment Grade Corporate Bond ETF