Decide on Discipline With Corporate Bonds

By Todd Shriber via

Discipline is one of the most common and important traits shared by successful investors. Thing is, the more trying a particular market environment is, the more difficult it becomes for investors, even some professionals, to exercise proper discipline.

Such a scenario could be playing out right now in the corporate credit market. As investors fret about the potential for a spate of downgrades coming in 2019 for investment-grade corporate bonds that currently have tenuous grasps on quality ratings, many are departing credit funds. In the world of exchange traded funds (ETFs) three of this year’s 10 worst offenders in terms of assets lost are corporate bond funds, including one investment-grade product.

One way investors can exercise discipline with corporate bonds is to focus on fundamentals, something many basic indexes devoted to this asset class do not do. The newly minted JPMorgan Corporate Bond Research Enhanced ETF (JIGB) could be a game changer for credit investors at a time when fundamentals are taking on added importance.

Actively manged, the JPMorgan Corporate Bond Research Enhanced ETF (JIGB) looks to outperform the Bloomberg Barclays US Corporate Bond Index while maintaining a similar risk profile to that benchmark.

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