Why Investors Ought to Consider Corporate Bond ETFs

Corporate debt has continued to grow worldwide, and in North America, a number of exchange traded funds (ETFs) have popped up to service investors looking to gain exposure to this asset class while diversifying appropriately (bond purchases often have to be made in large increments, making it difficult for retail investors to get in on the action without paying a relatively high entry fee, for some fixed income securities).

Corporate debt comes in a wide range of flavors for investors with different risk profiles. For longer-term investors who wish to manage risk levels and obtain a reasonably yield, the iShares Intermediate-Term Corporate Bond ETF (IGIB) is an excellent way to do so.

This ETF contains an index of U.S.-denominated bonds which are investment grade and have medium-term maturities (i.e., between five and 10 years).

The fund also happens to be weighted by market capitalization, meaning more bonds from larger companies are included in the ETF (bonds which are, by definition, more liquid and have lower transaction fees involved), lowering the overall MER of IGIB to 0.06% - a steal, given the fact this ETF carries the lowest MER among its peers for a comparable product.

Finding low-cost, high-quality options in the ETF space is becoming increasingly difficult to do, given the range of exchange traded fund products out there now. For those interested in corporate bonds, I would suggest taking a deeper look at the iShares Intermediate-Term Corporate Bond ETF.

Invest wisely, my friends.