Investment-grade corporate debt is typically less volatile than the the equity market. Over the past three years, total return volatility for U.S. investment grade corporate bonds was roughly 3.4%, compared to the total return volatility near 10% for U.S. stocks.
“As the Federal Reserve notches up its policy rate, some investors have been turning to short-maturity bonds: 2-year Treasury yields have offered a similar yield to the 10-year, with substantially lower interest rate risk. For incremental yield potential, think about short-term investment grade credit: the iShares 0-5 Year Investment Grade Corporate Bond ETF (SLQD), has a 30-day SEC yield of 3.3% (as of 9/28), compared with 2.8% for the 2-year Treasury and 3.1% for the 10 year,” according to BlackRock.
For more information on the fixed-income market, visit our bond ETFs category.