The quantitative easing program by the Federal Reserve is sweetening the pot for fixed income investors looking for corporate bonds and high yield exposure. For example, airplane manufacturer Boeing has been seeing strong demand for its latest bond offering.
Per a CNBC report, media sources “told CNBC’s David Faber that demand for new Boeing debt was strong across multiple maturities. Boeing shares jumped 3% to highs of the day amid the report.”
“The strong demand for Boeing’s paper could add up to as much as $75 billion in 5-, 7-, 10-, 20-, 30-, and 40-year bonds for the planemaker, people familiar with the matter said,” the report added further. “Boeing is interested in raising up to $20 billion in new debt, but given the increased demand, the company may be looking for more now, sources said.”
Boeing is one of the many companies that have been offering high yield debt as the Fed is backstopping corporate bonds to help shore up the economy amid the coronavirus pandemic. Other companies like Delta Airlines and Netflix are offering new debt issues to raise capital as the markets remain uncertain in a post-coronavirus environment.
With the Federal Reserve stepping in to purchase corporate bonds to help keep the economy afloat, one ETF to consider is the Goldman Sachs Access Investment Grade Corporate Bond ETF (GIGB). GIGB seeks to provide investment results that closely correspond to the performance of the FTSE Goldman Sachs Investment Grade Corporate Bond Index.
The fund seeks to achieve its investment objective by investing at least 80% of its assets (exclusive of collateral held from securities lending) in securities included in its underlying index. The index is a rules-based index that is designed to measure the performance of investment grade, corporate bonds denominated in U.S. dollars that meet certain liquidity and fundamental screening criteria.
For a high yield option to squeeze out that extra yield albeit more risk, take a look at the Goldman Sachs Access High Yield Corporate Bond ETF (GHYB). GHYB seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Goldman Sachs High Yield Corporate Bond Index.
The fund seeks to achieve its investment objective by investing at least 80% of its assets (exclusive of collateral held from securities lending) in securities included in its underlying index. The index is a rules-based index that is designed to measure the performance of high yield corporate bonds denominated in U.S. dollars that meet certain liquidity and fundamental screening criteria.
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