SLQD Profile
The iShares 0-5 Year Investment Grade Corporate Bond ETF is designed to provide investors with exposure to a diversified portfolio of short-term, investment-grade corporate bonds. Under normal market conditions, the fund allocates at least 80% of its total assets to the component securities of its underlying index. Additionally, the fund ensures that at least 90% of its assets are invested in fixed income securities that fall within the types included in the index.
The underlying index aims to capture the performance of U.S. dollar-denominated investment-grade corporate debt with maturities ranging from zero to five years. This focus on short-term bonds helps to limit interest rate risk and provides more stable returns compared to longer-duration bonds. The index includes a broad range of corporate bonds from various industries, issued by companies with high credit ratings, which are considered less risky compared to lower-grade debt.
The fund's strategy emphasizes stability and quality by investing in bonds that have been rated investment-grade by major credit rating agencies. Investment-grade bonds are those with ratings of BBB- or higher from Standard & Poor's, Baa3 or higher from Moody's, or equivalent ratings from other agencies. This focus on high-quality debt securities aims to provide investors with lower default risk and more predictable income streams.
By concentrating on short-term investment-grade corporate bonds, the fund seeks to offer a relatively lower volatility investment option compared to funds that hold longer-term or lower-rated bonds. The short duration of the bonds within the ETF helps mitigate the impact of interest rate fluctuations, making it a suitable choice for investors looking for stability and capital preservation within their fixed income allocations.
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