After a near-collapse in October, the corporate bond market is back on steady ground while continuing to deliver an attractive yield.
After trading around $100 for several years, the $8 billion iBoxx $ Investment Grade Corporate Bond Fund (LQD) nose-dived to just below $80 at the end of September as massive deleveraging caused demand for corporate debt to temporarily disappear.
As the deveraging wound down, credit markets began to unfreeze and LQD returned to normal levels.
The massive bond ETF tracks a rules-based index that consists of up to 100 highly liquid, investment grade, U.S. dollar-denominated corporate bonds that seeks to maximize liquidity while maintaining representation of the broader corporate bond market.
LQD carries a tiny expense ratio of 0.15% and the latest distribution yield is 6.6%.
See Investment Grade Credit on Sale for prior coverage of LQD.