Intermediate-Term Corporate Bond

Intermediate-term corporate bonds and ETFs invest in debt securities, issued by companies,... Intermediate-term corporate bonds and ETFs invest in debt securities, issued by companies, which have durations of 4-6 years (or, if duration is not available, maturities can range from 5-12 years). For investors trying to select bond funds and ETFs based on average maturity profiles, it is important to understand an underlying bond’s duration (predicts a bond’s price change due to change in interest rates) and convexity (a better price change estimator than duration) and compare bonds with different maturities and coupon rates to determine if it is right for their portfolio. As intermediate-term corporate bonds, these are more sensitive to changes in interest rates than short-term corporate bonds, but less sensitive to interest rate changes compared to long-term corporate bonds. Some conservative investors may purchase investment-grade intermediate-term corporate bonds in order to generate income in the medium term while being confident that the bond issuer is unlikely to default. Last Updated: 04/25/2024 View more View less

Intermediate-term corporate bonds and ETFs invest in debt securities, issued by companies, which have durations of 4-6 years (or, if duration is not available, maturities can range from 5-12 years). For investors trying... Intermediate-term corporate bonds and ETFs invest in debt securities, issued by companies, which have durations of 4-6 years (or, if duration is not available, maturities can range from 5-12 years). For investors trying to select bond funds and ETFs based on average maturity profiles, it is important to understand an underlying bond’s duration (predicts a bond’s price change due to change in interest rates) and convexity (a better price change estimator than duration) and compare bonds with different maturities and coupon rates to determine if it is right for their portfolio. As intermediate-term corporate bonds, these are more sensitive to changes in interest rates than short-term corporate bonds, but less sensitive to interest rate changes compared to long-term corporate bonds. Some conservative investors may purchase investment-grade intermediate-term corporate bonds in order to generate income in the medium term while being confident that the bond issuer is unlikely to default. Last Updated: 04/25/2024 View more View less