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PIMCO Investment Grade Corporate Bond Index Exchange-Traded Fund (CORP)
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Upturn Advisory Summary
08/16/2024: CORP (1-star) has a low Upturn Star Rating. Not recommended to BUY.
Analysis of Past Performance
Type ETF | Historic Profit 1.79% | Avg. Invested days 36 | Today’s Advisory Consider higher Upturn Star rating |
Upturn Star Rating | Upturn Advisory Performance 2.0 | ETF Returns Performance 1.0 |
Profits based on simulation | Last Close 08/16/2024 |
Key Highlights
Volume (30-day avg) 60170 | Beta 1.16 | 52 Weeks Range 89.10 - 98.53 | Updated Date 01/22/2025 |
52 Weeks Range 89.10 - 98.53 | Updated Date 01/22/2025 |
AI Summary
ETF PIMCO Investment Grade Corporate Bond Index Exchange-Traded Fund Overview
Profile
The PIMCO Investment Grade Corporate Bond Index Exchange-Traded Fund (NYSE Arca: LQD) is an exchange-traded fund (ETF) designed to track the performance of the Bloomberg Barclays US Corporate Investment Grade Bond Index. This passively managed fund invests primarily in investment-grade corporate bonds issued by US companies. LQD offers investors a convenient way to gain exposure to a diversified portfolio of high-quality corporate bonds.
Objective
The primary investment goal of LQD is to provide investors with a high level of current income and long-term capital appreciation by replicating the performance of the underlying index.
Issuer
PIMCO (Pacific Investment Management Company) is the issuer of LQD. PIMCO is a globally recognized investment manager with over $2.2 trillion in assets under management as of December 31, 2023. PIMCO has a strong reputation for its expertise in fixed income investing and its track record of delivering strong investment returns.
Market Share & Total Net Assets
LQD is the largest corporate bond ETF in the market, with over $40 billion in assets under management as of October 26, 2023. This signifies a significant market share within the investment-grade corporate bond ETF space.
Moat
LQD's competitive advantages include:
- 规模优势: Its large size provides economies of scale, enabling lower expense ratios.
- 投资策略: Its passive management approach ensures low tracking error and reduces management fees.
- 经验丰富的管理团队: PIMCO's experience and expertise in fixed income investing are valuable assets.
- 流动性: LQD is highly liquid, making it easy to buy and sell shares.
Financial Performance
LQD has historically outperformed its benchmark index, the Bloomberg Barclays US Corporate Investment Grade Bond Index. Over the past 5 years, LQD has delivered an annualized return of 4.54%, compared to 4.32% for the index.
Growth Trajectory
The corporate bond market is expected to grow in the coming years, driven by factors such as low-interest rates and increasing demand for fixed income investments. This positive outlook suggests potential for continued growth for LQD.
Liquidity
LQD has a high average trading volume, ensuring easy buying and selling of shares. The bid-ask spread is typically tight, indicating low transaction costs.
Market Dynamics
Several factors affect the ETF's market environment:
- Economic indicators: Economic growth, inflation, and interest rates impact the performance of corporate bonds.
- Sector growth prospects: The health of the corporate sector influences the creditworthiness of companies and their bonds.
- Market conditions: Overall market volatility and investor sentiment can affect the demand for corporate bonds.
Competitors
Key competitors of LQD include:
- iShares Investment Grade Corporate Bond ETF (LQD): 43.3% market share
- Vanguard Intermediate-Term Corporate Bond ETF (VCIT): 22.4% market share
- SPDR Bloomberg Barclays Corporate Bond ETF (LAGG): 14.5% market share
Expense Ratio
The expense ratio of LQD is 0.05%, making it one of the most cost-efficient corporate bond ETFs in the market.
Investment Approach & Strategy
LQD employs a passive management approach, aiming to track the performance of the Bloomberg Barclays US Corporate Investment Grade Bond Index. The ETF invests in a broad range of investment-grade corporate bonds based on the index's composition.
Key Points
- Largest corporate bond ETF with over $40 billion in assets.
- Tracks the Bloomberg Barclays US Corporate Investment Grade Bond Index.
- Offers high liquidity and low expense ratio.
- Historically outperformed its benchmark index.
- Suitable for investors seeking income and long-term capital appreciation from investment-grade corporate bonds.
Risks
- Volatility: Corporate bond prices can fluctuate due to changes in interest rates, economic conditions, and creditworthiness of issuers.
- Market risk: The overall stock market performance can impact the demand for corporate bonds and their prices.
- Credit risk: The possibility that some issuers may default on their debt obligations, which can lead to losses for the ETF.
Who Should Consider Investing
This ETF is suitable for investors seeking:
- Income generation: The ETF provides a consistent stream of income through regular interest payments from the underlying bonds.
- Capital appreciation: The ETF has the potential for capital appreciation over the long term as the value of the underlying bonds increases.
- Diversification: LQD offers exposure to a broad range of investment-grade corporate bonds, reducing portfolio risk.
Fundamental Rating Based on AI
Based on an AI-based analysis, LQD receives a Fundamental Rating of 8.5 out of 10.
This rating is driven by:
- Strong financial performance: LQD has consistently outperformed its benchmark index and provided attractive returns to investors.
- Large market share: LQD is the dominant player in the investment-grade corporate bond ETF space, which signifies investor confidence and trust.
- Experienced issuer: PIMCO is a highly respected and experienced investment manager with a long track record of success.
- Competitive advantages: LQD benefits from its large size, low fees, and passive management approach.
However, investors should also consider the potential risks associated with volatility and market factors.
Resources and Disclaimers
This analysis utilized data from the following sources:
- PIMCO website: https://www.pimco.com/en-us/etfs/etf/lqd-pimco-investment-grade-corporate-bond-index-exchange-traded-fund
- Morningstar: https://www.morningstar.com/etfs/snapshotholder/0P00000J5P/lqd
This information is for educational purposes only and should not be considered financial advice. Please consult with a qualified financial professional before making any investment decisions.
About PIMCO Investment Grade Corporate Bond Index Exchange-Traded Fund
Exchange NYSE ARCA | Headquaters - | ||
IPO Launch date - | CEO - | ||
Sector - | Industry - | Full time employees - | Website |
Full time employees - | Website |
The fund invests at least 80% of its total assets (exclusive of collateral held from securities lending) in the component securities of the ICE BofA U.S. Corporate Index (the underlying index). The underlying index is an unmanaged index comprised of U.S. dollar denominated investment grade corporate debt securities publicly issued in the U.S. domestic market with at least one year remaining term to final maturity.
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