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The investment landscape is witnessing a renewed interest in investment grade (IG) corporate bonds.
This bullish trend comes as the yields on US Treasuries experienced a significant decline after over a month of continuous rise, prompted by not-so-hawkish comments from Federal Reserve officials. Over the week, the yield on the 30-year Treasury bond fell from 4.94% to 4.76%, a decrease of 18 basis points. The 10-year Treasury yield lost 17 basis points from 4.80% to 4.63%. Over six consecutive weeks, it had risen by 60 basis points. while the U.S. 3-month Treasury Bill rate stayed practically the same, at 5.%.
The decline in Treasury bond yields pushed investment grade corporate bonds higher after five weeks in negative territory. The IBOXX € Liquid Corporates snapped its losing streak by rising 0.87% for the week. Meanwhile, in the U.S., the IBOXX $ Domestic Corporates index gained 0.69%.
IG bond ETFs rebounded accordingly, recording significant inflows. The iShares iBoxx$ Investment Grade Corporate Bond ETF (LQD) gained 1.62% and registered US$ 684 million of inflows, while the iShares Broad USD Investment Grade Corporate Bond ETF rose by 1.24% and attracted US$ +86 million of positive flows.
This content was originally published by our partners at ETF Central.
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