Fixed Income Can Capitalize on Market Pullbacks | ETF Trends

Even though April saw some market pullbacks, fixed income investments remain valuable options.

In instances of market pullbacks, investors can buy the dip and tap into bond options to secure potential yields. Investors seeking to position a portfolio ahead of rate cuts can use fixed income to generate potential value.

A wide variety of bonds can be used to provide income amid the pullback. For those seeking to mitigate risk, corporate bonds rated BBB can prove to be a highly valuable option. Those bonds can provide stronger returns compared to similar options within the investment-grade space.

Investment-Grade Fixed Income Options

The BondBloxx BBB rated 1-5 Year Corporate Bond ETF (BBBS) can provide investors with exposure to investment-grade options. True to its name, BBBS invests in corporate bonds rated BBB with maturities ranging between one-to-five years.

Keeping the Federal Reserve’s potential rate cuts in mind, short- to intermediate-duration bond exposure can be beneficial to investors. While longer-duration bonds can risk volatility from long-term rates, short and intermediate bonds can capture key potential returns from U.S. Treasuries. BBBS provides a nearly 50/50 split of intermediate and short-duration bonds.

For investors interested in taking on a little more risk, high yield bonds can capitalize on current credit spreads. With the U.S. economy continuing to remain strong, high yield invests can provide robust returns for investors.

High Yield, High Reward

The BondBloxx B-Rated USD High Yield Corporate Bond ETF (XB) can deliver quality income for investors. The fund invests primarily in junk bonds rated B1 through B3. Junk bonds rated B are less likely to default than some of the other high yield options in the bond space, mitigating potential risk.

While the majority of XB’s bond holdings have intermediate-duration maturities, roughly 20% of holdings are in short-term bonds. This allows the fund to provide some short-duration access while prioritizing intermediate-duration value.

BondBloxx has a vast suite of available ETFs for investors seeking fixed income options. One of its largest funds, the BondBloxx Bloomberg Six Month Target Duration US Treasury ETF (XLHF), has over $1.2 billion in assets under management.

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