Corporate Bond

Corporate bond funds and ETFs focus on debt securities issued by companies,... Corporate bond funds and ETFs focus on debt securities issued by companies, as opposed to government entities. Depending on a fund’s underlying mandate, it may own corporate bonds of varying credit quality (investment-grade or high-yield), varying maturity spectrums, or varying degree of geographic diversification (U.S-only bonds versus foreign bonds). These funds can also be managed differently (passive or active) . The average duration (time to maturity) of a fund’s portfolio indicates how sensitive its price will be to changes in interest rates. Investors concerned about the possibility of a rise in interest rates will tend to own corporate funds and ETFs with a low duration. Meanwhile, investors who think interest rates may fall will tend to own corporate funds and ETFs with a higher duration. Last Updated: 03/30/2023 View more View less

Corporate bond funds and ETFs focus on debt securities issued by companies, as opposed to government entities. Depending on a fund’s underlying mandate, it may own corporate bonds of varying credit quality (investment-grade... Corporate bond funds and ETFs focus on debt securities issued by companies, as opposed to government entities. Depending on a fund’s underlying mandate, it may own corporate bonds of varying credit quality (investment-grade or high-yield), varying maturity spectrums, or varying degree of geographic diversification (U.S-only bonds versus foreign bonds). These funds can also be managed differently (passive or active) . The average duration (time to maturity) of a fund’s portfolio indicates how sensitive its price will be to changes in interest rates. Investors concerned about the possibility of a rise in interest rates will tend to own corporate funds and ETFs with a low duration. Meanwhile, investors who think interest rates may fall will tend to own corporate funds and ETFs with a higher duration. Last Updated: 03/30/2023 View more View less