“More investors are growing cautious about the corporate debt market, with heavily debt-laden companies like General Electric Co., Ford Motor Co. and Campbell Soup Co. flashing warning signs as global growth slows and interest rates rise,” according to Bloomberg.
Roughly half of U.S. corporate bonds that currently carry investment-grade ratings have a BBB rating of some kind, indicating those issues are perilously close to junk territory. Widening credit spreads would further pressure corporate bonds, potentially increasing the allure of safer destinations like BIL and JPST.
The $3.70 billion JPST can hold corporate securities, asset-backed securities, mortgage-backed and mortgage-related securities, and high quality money market instruments such as commercial paper and certificates of deposit.
For more information on the fixed-income markets, visit our bond ETFs category.