IGIB: Banking Exposure And Duration Concerns Under Trump

(6min)

Summary

  • Historically low credit spreads make any credit risk uninteresting.
  • Duration is also not favorable, with Trump's rhetoric and possible actions contributing to upward revisions in inflation expectations.
  • We also don't particularly like taking the credit approach to banking right now, with deregulation also on the agenda.
  • We are getting out of the way of IGIB.
  • Looking for a portfolio of ideas like this one? Members of The Value Lab get exclusive access to our subscriber-only portfolios. Learn More »

Bond word in wooden blocks with coins on floor. Investment bond, Bond increasing, Raising funds and financial and banking concept.

Wipada Wipawin

The iShares 5-10 Year Investment Grade Corporate Bond ETF (NASDAQ:IGIB) is an ETF we'd avoid. Credit spreads are at historical lows, so we don't like the value possibilities here with the bet on credit spreads. The bigger matter is

Thanks to our global coverage we've ramped up our global macro commentary on our marketplace service here on Seeking Alpha, The Value Lab. We focus on long-only value ideas, where we try to find international mispriced equities and target a portfolio yield of about 4%. We've done really well for ourselves over the last 5 years, but it took getting our hands dirty in international markets. If you are a value-investor, serious about protecting your wealth, us at the Value Lab might be of inspiration.

This article was written by

The Valkyrie Trading Society is a team of analysts sharing high conviction and obscure developed market ideas that are downside limited and likely to generate non-correlated and outsized returns in the context of the current economic environment and forces. They are long-only investors.

They lead the investing group The Value Lab where they offer members a portfolio with real time updates, chat to answer questions 24/7, regular global market news reports, feedback on member stock ideas, new trades monthly, quarterly earnings write-ups, and daily macro opinions.

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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