Corporate Bond ETF (LQD) Hits New 52-Week High
For investors looking for momentum, iShares iBoxx $ Investment Grade Corporate Bond ETF LQD is probably a suitable pick. The fund just hit a 52-week high and is up 29.3% from its 52-week low price of $104.95/share.
Let’s take a look at the fund and its near-term outlook to gain an insight into where it might be headed:
LQD in Focus
This ETF seeks to provide exposure to a broad range of U.S. investment grade corporate bonds and tracks the Markit iBoxx USD Liquid Investment Grade Index. It has AUM of $56.32 billion and charges 14 basis points (bps) in annual fees (as per the prospectus).
Why the Move?
The Federal Reserve has announced new initiatives to support the ailing U.S. economy. The central bank has pledged to make individual corporate bonds purchases under its Secondary Market Corporate Credit Facility (SMCCF), adding liquidity to the market. Notably, under the SMCCF emergency lending program that has a capacity of $250 billion, the Fed has already invested about $5.5 billion in ETFs that buy corporate bonds. The Fed has pledged to keep pumping in stimulus to support the economy and strengthen it. These factors are making funds like LQD attractive investment options. Also, the coronavirus-induced global economic concerns might spur demand among investors.
More Gains Ahead?
It seems like the fund will remain strong, with a positive weighted alpha of 10.70, which gives cues of further rally.
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iShares iBoxx Investment Grade Corporate Bond ETF (LQD): ETF Research Reports
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