SLQD: Short Duration Bond Fund From iShares

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Binary Tree Analytics
4.78K Followers
(7min)

Summary

  • The ETF invests in U.S. dollar-denominated, investment-grade corporate bonds with maturities of less than five years.
  • It has an effective duration of 2 years and a granular portfolio of over 2600 names. The portfolio is concentrated in the banking sector, representing 33% of the fund.
  • The fund offers a 4.4% 30-day SEC yield, comprising risk-free rates and a credit spread.
  • We expect the ETF to post a return of roughly 6% in the next 12 months in a soft landing base case scenario.
  • The main risk factor for the ETF is represented by the re-emergence of inflationary pressures.

Connectedness

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Thesis

iShares is very good at covering all the large building blocks in the financial markets. The ETF provider has staple names in the equity and fixed income markets, names which have enormous liquidity and are traded

This article was written by

Binary Tree Analytics profile picture
4.78K Followers
With an investment banking cash and derivatives trading background, Binary Tree Analytics ('BTA') aims to provide transparency and analytics in respect to capital markets instruments and trades. BTA focuses on CEFs, ETFs and Special Situations, and aims to deliver high annualized returns with a low volatility profile. We have been investing for over 20 years after obtaining a Finance major at a top university.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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