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Below-Investment-Grade Corporate Bond

Below-investment grade corporate bond funds and ETFs invest in debt securities issued... Below-investment grade corporate bond funds and ETFs invest in debt securities issued by companies. In terms of credit risk that a bond issuer may default, as determined by rating agencies Moody’s and Standard and Poor’s (S&P), these securities fall in between low-risk investment-grade corporate bonds and corporate junk bonds. S&P and Moody's typically assign ratings below BBB and Baa3, respectively, for below-investment-grade credit issuers. Below-investment grade bonds may be attractive for more aggressive investors, as the higher risk of default (based on their credit quality) is usually reflected in yields exceeding those of investment-grade bonds. Companies issue below-investment grade bonds with different maturities. The average duration (time to maturity) of a bond indicates how sensitive its price will be to changes in interest rates. Investors who are concerned about the possibility of a rise in interest rates will tend to own below- investment grade corporate bonds with a low duration. Meanwhile, investors who think interest rates may rise will tend to own below-investment grade bonds with a high duration. Last Updated: 02/21/2024 View more View less

Below-investment grade corporate bond funds and ETFs invest in debt securities issued by companies. In terms of credit risk that a bond issuer may default, as determined by rating agencies Moody’s and Standard... Below-investment grade corporate bond funds and ETFs invest in debt securities issued by companies. In terms of credit risk that a bond issuer may default, as determined by rating agencies Moody’s and Standard and Poor’s (S&P), these securities fall in between low-risk investment-grade corporate bonds and corporate junk bonds. S&P and Moody's typically assign ratings below BBB and Baa3, respectively, for below-investment-grade credit issuers. Below-investment grade bonds may be attractive for more aggressive investors, as the higher risk of default (based on their credit quality) is usually reflected in yields exceeding those of investment-grade bonds. Companies issue below-investment grade bonds with different maturities. The average duration (time to maturity) of a bond indicates how sensitive its price will be to changes in interest rates. Investors who are concerned about the possibility of a rise in interest rates will tend to own below- investment grade corporate bonds with a low duration. Meanwhile, investors who think interest rates may rise will tend to own below-investment grade bonds with a high duration. Last Updated: 02/21/2024 View more View less

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As of 2/21/24

We couldn't find any Security within this investment theme.

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