The Federal Reserve’s rising interest rates have been a main contributing factor in the downfall of investment-grade bonds this year. As the Fed hikes the short-term fed funds rate, longer-duration investment-grade bonds with historically low yields have appeared less attractive. IGIB has a 30-day SEC yield of 4.44%.
“We currently see a rate near the top of this range needed to stabilize the U.S. economy and debt levels,” according to BlackRock. “Yet we expect the Fed to become more cautious as it nears neutral. As a result, we expect the FOMC to pause its quarterly pace of hikes amid slowing growth and inflation in 2019.”
About 91.50% of IGIB’s 1,745 holdings are rated A or BBB.
For more information on the fixed-income space, visit our bond ETFs category.