InvestmentGrade News & Analysis
4 articles
Market Mood
BlackRock (BLK) Sees Historic 7%+ Yield Opportunity in High-Quality Bonds
BlackRock's chief investment officer for global fixed income, Rick Rieder, stated that investors now have a historic opportunity to build diversified bond portfolios yielding more than 7% with less than three years duration and average credit quality of A-. Duration measures a bond’s price sensitivity to interest rate changes, with shorter maturities usually having lower duration. Despite volatile bond markets, Rieder highlighted that current high yields are not accompanied by significant default or economic risks, describing the environment as strong. Rieder referenced investment-grade corporate bonds as the best current opportunity, noting increased issuance from major technology 'hyperscalers' like Alphabet, Amazon, Meta Platforms, and Oracle, which have issued about $228.4 billion in bonds year to date. These companies have low leverage and strong cash flow. BlackRock’s iShares Flexible Income Active ETF, managed by Rieder, increased its allocation to investment-grade corporates from 8.5% in July to 14.3% recently. Rieder cautioned investors to be patient with the potential for interest rates to rise further, but emphasized that starting yields around 7.25% are a strong indicator of future returns over holding periods of a year or more. This viewpoint suggests that high-quality bonds currently offer attractive income prospects for investors despite recent market volatility.
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Axis Bank (AXIS) $300M Notes Rated Baa3 by Moody's
Axis Bank's $300 million notes have been assigned a Baa3 rating by Moody's. This rating indicates that the notes are investment grade but carry a degree of risk. The move is seen as significant as the rating could influence investor confidence and market demand for the notes. Given the current economic environment, the rating’s implications for Axis Bank (AXIS) and its funding arrangements are noteworthy for investors.
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ANGL ETF Offers 6% Yield by Buying Formerly Investment-Grade Bonds
The VanEck Fallen Angel High Yield Bond ETF (ANGL) provides approximately 6% yield by investing in formerly investment-grade bonds that were downgraded, outperforming the 10-year Treasury’s yield of 4.5%. The fund maintains a portfolio that behaves less like stocks during credit selloffs, with 91% of its assets in debt securities. Paramount Global (PSKY) and Celanese (CE) each account for about 8% of ANGL's holdings. This unique strategy may appeal to income investors seeking yield without the risks associated with lower-grade bonds.
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VCIT and IGIB Bond ETFs Compared: Size, Returns, and Yields
The Vanguard Intermediate-Term Corporate Bond ETF (VCIT) and iShares 5-10 Year Investment Grade Corporate Bond ETF (IGIB) have similar expense ratios and returns, with VCIT at 0.03% and IGIB at 0.04%. As of March 24, 2026, VCIT reported a 1-year return of 6.16% and a dividend yield of 4.74%, while IGIB had a return of 6.19% and a yield of 4.72%. VCIT has $68.5 billion in total assets, significantly larger than IGIB's $17.4 billion. Both ETFs suffered similar maximum drawdowns of approximately 20.56% for VCIT and 20.63% for IGIB over the past five years, indicating comparable risks. This analysis is important for investors looking for low-cost, moderate-income investment options in the corporate bond market.
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