The largest issuers include strong, stable names like Apple (AA+), J.P. Morgan Chase (A-), Morgan Stanley (BBB+) and Verizon Communications (BBB+).
Specifically, LQD’s credit profile includes AAA 1.8%, AA 10.3%, A 43.0% and BBB 45.0%.
Rosenbluth, though, warned of LQD’s slightly elevated duration, which has contributed negatively to S&P’s research. Duration is a measure of a fund’s sensitivity to changes in interest rates, so a higher duration reflects a greater sensitivity to changes in rates.
“However, if rates continue to stay relatively low, investors will be further rewarded for taking on the extra risk,” Rosenbluth said, adding that the Fed will likely only hike rates once in December and raise rates three times for 2017.
For more information on the credit markets, visit our corporate bonds category.
iShares iBoxx $ Investment Grade Corporate Bond