ETFdb Logo
  • ETF Database
  • Channels
    • Themes
      • Active ETF
      • Alternatives Channel
      • Artificial Intelligence
      • China Insights
      • Climate Insights
      • Core Strategies
      • Crypto
      • Disruptive Technology
      • Energy Infrastructure
      • ETF Building Blocks
      • ETF Education
      • ETF Investing
      • ETF Strategist
      • Faith-Based Investing
      • Financial Literacy
      • Fixed Income
      • Free Cash Flow
      • Innovative ETFs
      • Invest Beyond Cash
      • Leveraged & Inverse
      • Modern Alpha
      • Portfolio Strategies
      • Tax Efficient Income
    • Asset Class
      • Equity
        • U.S. Equity
        • Int'l Developed
        • Emerging Market Equities
      • Alternatives
        • Gold/Silver/Critical Materials
        • Crypytocurrency
        • Currency
        • Volatility
      • Fixed Income
        • Investment Grade Corporates
        • US Treasuries & TIPS
        • High Yield Corporates
        • Int'l Fixed Income
    • ETF Ecosystem
    • ETFs in Canada
    • Market Outlook
    • Crypto ETF Hub
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Database Categories
    • Indexes
    • Scenario Analysis
    • Watchlists
    • Head-To-Head ETF Comparison Tool
    • Mutual Fund To ETF Converter
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF of the Week Podcast
    • Gaining Perspective Podcast
    • ETF Prime Podcast
    • Video
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. This Corporate Bond ETF Holds Steady in Trying Environment
News
Share

This Corporate Bond ETF Holds Steady in Trying Environment

Tom LydonMar 09, 2020
2020-03-09

Investors looking for an asset class that’s holding steady among the recent market swoon and one that features steady income should consider investment-grade corporate bonds. More discerning eyes should view the FlexShares Credit‐Scored US Long Corporate Bond Index Fund (LKOR B).

LKOR tracks a fixed-income portfolio of corporate debt securities with a longer maturity selected based on a proprietary credit evaluation process.

LKOR excludes illiquid and smaller issuers to improve liquidity and transparency. Additionally, the fund targets company bonds that have a higher credit quality, lower risk of default and potential for higher yield and price appreciation. LKOR holds 219 bonds with a weighted average maturity of 14.77 years, according to issuer data.

LKOR, which yields 3.54%, is up about 6% this year and hit an all-time high on Thursday on a bad day for equities.

Looking Into LKOR

Bond investors who are wary of dipping too far into junk bond territory but want better yield payouts than Treasuries may consider investment-grade corporate bond ETFs.

With Treasury yields recently having breached the 1% level, advisors and investors are scrambling to source yield with bonds, but with the coronavirus knocking high-yield corporate debt down a peg, other corporate bond strategies could come into focus.

The ongoing low-yield environment and improving economic sentiment has helped push investors toward corporate debt. However, potential investors should be aware that corporate bonds have historically exhibited greater volatility than U.S. Treasuries due to the increased volatility in corporate cash flows and credit risks, along with greater liquidity risks.

Related: 10 Best Fixed Income ETFs of 2019

The current environment is trying for corporate bonds and the related ETFs. With elevated concerns regarding a raft of potential downgrades for corporate debt hovering just above junk status, some bond investors are emphasizing fundamentals, a virtue extolled by LKOR.

LKOR follows the Northern Trust Credit-Scored US Long Corporate Bond Index, which addresses potential corporate bond liquidity challenges by optimizing a carefully selected subset of all credit issuers from which illiquid, orphaned and small lot names have been removed,” said FlexShares. “Then, multiple factors are taken into account including the characteristics of issuers’ total debt structure, minimum exposure percentages, and odd-lot trade restrictions, to aid in developing our corporate bond indexes.”

This article originally appeared on ETFTrends.com.


Content continues below advertisement

» Popular Pages

  • Tickers
  • Articles

Jun 20

Main Management Market Note: June 20, 2025

Jun 20

Treasury Yields Snapshot: June 20, 2025

Jun 20

S&P 500 Snapshot: Index Down for Second Straight Week

Jun 20

AVEM Hits $10 Billion Milestone Amid Rising EM Demand

Jun 20

Gold Miner ETFs Keep Rallying, But Investor Demand Lags

Jun 20

International Stocks Outperforming the U.S. – Can It Last?

Jun 20

Solana ETFs: Summer of SOL

Jun 20

Feeling Unsure About Rates? Consider Active ETFs

Jun 18

WGMI a Second Quarter Top Performer

Jun 18

T. Rowe ETFs: Active Benefits at Competitive Prices

QQQ

Invesco QQQ Trust Series I

VOO

Vanguard S&P 500 ETF

IBIT

iShares Bitcoin Trust ETF

SCHD

Schwab US Dividend Equity ETF...

SHLD

Global X Defense Tech ETF

GLD

SPDR Gold Shares

SPY

SPDR S&P 500 ETF Trust

VGT

Vanguard Information...

SMH

VanEck Semiconductor ETF

IVV

iShares Core S&P 500 ETF


Content continues below advertisement

Loading Articles...
Our Sites
  • VettaFi
  • Advisor Perspectives
  • ETF Trends
Tools
  • ETF Screener
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Database Pro
More Tools
  • Financial Advisor & RIA Center
Explore ETFs
  • ETF News
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Information
  • Contact Us
  • Terms of Use and Privacy Policy
  • © 2025 VettaFi LLC. All rights reserved.

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X