FMD Capital Management

Posts Tagged: lqd

ETF Investors Seek Shelter In Investment Grade Corporate Bonds

Written by David Fabian, March 07th, 2017

Rising interest rates are making many bond fund investors nervous about the prospects for weakening future returns and unstable risk dynamics.  This fear is putting some fuel behind ETF strategies that short Treasuries or sectors such as bank loans that have historically performed well in a rising rate environment.

The PowerShares Bank Loan Portfolio (BKLN), which invests in a basket of floating rate notes and senior loans, has accumulated more than $2.4 billion since the U.S. election.  That confidence has so far been rewarded with a steadily rising price trend versus the volatility that has pervaded most aggregate bond benchmarks.

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U.S. Bond ETFs Benefit From Global Yield Shortage

Written by David Fabian, June 14th, 2016

The Federal Reserve has been threating to raise interest rates for a number of months now and ETF investors have opted to call their bluff.  After being burned by the chase for high yield through risky and esoteric asset classes, the focus has now turned towards enthusiasm for plain-vanilla bond funds.

A check of the year-to-date fund flow tracker at shows a willingness to gobble up diversified U.S.-focused bond indexes such as the iShares Core U.S. Aggregate Bond ETF (AGG), iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD), and Vanguard Total Bond Market ETF (BND).  Together these three funds have accumulated over $12.5 billion in new inflows since the beginning of 2016 and have easily distanced themselves as the top bond ETFs in terms of total size.

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Corporate Bond ETFs Are Back In High Demand

Written by David Fabian, April 05th, 2016

Exchange-traded funds that track corporate bond benchmarks are back in high demand this year after a lackluster performance in 2015 threatened to undermine confidence in the credit markets.  Fixed-income investors have seemingly shrugged off the threat of rising interest rates and weakening credit fundamentals to pounce on sectors demonstrating relative value to high-flying Treasury and municipal bonds.

The iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) is a prime example of this trend.  This ETF tracks 1,564 corporate bonds of companies with high quality credit ratings such as Verizon Communications (VZ) and Apple Inc (AAPL).

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3 ETF Indexes To Watch Ahead Of The Fed

Written by David Fabian, December 16th, 2015

Investors with diversified portfolios should be in the phase of the year where they are evaluating their existing positions and looking to make strategic changes for 2016. This may include trimming underperforming holdings, doing some tax-efficient repositioning, or simply comparing your performance versus a reasonable benchmark. Read more

Why The Drop In Stocks Feels So Painful

Written by David Fabian, August 30th, 2015

The last week and a half has certainly been a roller coaster ride of emotions in the stock market.  After a 3-day sell off that culminated in extreme levels of fear, broad-based equity benchmarks managed to stage a sharp rally that has alleviated (some) feelings of panic.

By the numbers, the SPDR S&P 500 ETF (SPY) fell 12% from all-time July high to the depths of the August lows.  It has subsequently rebounded half of that decline as we head into the first days of September.  Read more