Bond ETFs to Capitalize on Loose Global Central Bank Policies

Consequently, the increased support from the central bank could further bolster corporate debt around the globe as income-starved investors squeeze out yields from anywhere they can.

For ETF investors interested in U.S. corporate bond exposure, there are a number of options available. For instance, the iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSEArca: LQD) has a 8.59 year duration and a 2.87% 30-day SEC yield, Vanguard Intermediate-Term Corporate Bond ETF (NYSEArca: VCIT) has a 6.5 year duration and a 2.75% 30-day SEC yield, and SPDR Barclays Intermediate Term Corporate Bond ETF (NYSEArca: ITR) has a 4.41 year duration and a 2.16% 30-day SEC yield.

Given the increased buying pressure, Eurozone bond yields could fall even further and prices rise. While there are no Europe-focused speculative-grade debt ETFs on the market, U.S. investors can still gain exposure to European markets through international investment-grade bond ETFs with heavy tilts toward these countries.

For example, the PowerShares International Corporate Bond Portfolio (NYSEArca: PICB) holds 23.2% U.K., 19.2% France, 9.2% Germany, 6.5% Italy, 6.0% Netherlands, 4.8% Spain, 3.7% Switzerland and 2.5% Sweden. PICB has a 6.81 year duration and a 0.74% 30-day SEC yield.

The SPDR Barclays International Corporate Bond ETF (NYSEArca: IBND) includes 14.3% France, 13.1% U.K., 10.3% Germany, 7.8% Netherlands, 7.0% Italy, 5.1% Spain, 5.0% Switzerland, 2.7% Sweden, 2.2% Belgium, 0.6% Denmark, 0.5% Norway and 0.2% Portugal. IBND has a 6.07 year duration and a 0.05% 30-day SEC yield.

For more information on the credit market, visit our corporate bonds category.