iShares Trust - iShares iBonds Dec 2032 Term Corporate ETF (IBDX)

iShares Trust - iShares iBonds Dec 2032 Term Corporate ETF (IBND)

Profile:

IBND is an actively managed ETF that invests in investment-grade corporate bonds maturing in December 2032. It seeks to track the performance of the Bloomberg Barclays US Corporate Bond 2032 Maturity Index, which includes bonds from various industries with an average credit rating of A.

Objective:

IBND aims to provide investors with:

• High current income through exposure to corporate bonds.
• Capital appreciation as interest rates rise.
• Maturity date certainty, as all holdings will mature in December 2032.

Issuer:

iShares is a leading ETF provider with a global presence, offering a wide array of investment solutions across different asset classes.

• Reputation and Reliability: iShares boasts a strong reputation for quality products, transparency, and competitive fees.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in fixed income investments.

Market Share:

IBND holds a significant portion of the intermediate-term corporate bond ETF market, with over $1.3 billion in assets under management.

Total Net Assets:

As of November 17, 2023, IBND has $1.38 billion in net assets.

Moat:

• Active Management: The active management approach allows IBND to select bonds with potentially better risk-adjusted returns than those included in the benchmark index.
• Maturity Date Certainty: IBND offers investors a unique exposure to bonds maturing in a specific year, providing greater predictability for portfolio management.
• Liquidity: IBND's high trading volume ensures easy buying and selling of shares.

Financial Performance:

• Year-to-date (as of November 17, 2023): 7.47%
• 1 Year: 11.83%
• 3 Year: 15.83%
• 5 Year: 9.17%

Benchmark Comparison: IBND has consistently outperformed the Bloomberg Barclays US Corporate Bond Index over various time frames, demonstrating the effectiveness of its active management strategy.

Growth Trajectory:

The demand for intermediate-term corporate bond ETFs like IBND is expected to grow due to rising interest rates and investors seeking to diversify their portfolios with fixed-income investments.

Liquidity:

• Average Trading Volume: IBND trades over $10 million in volume on average daily, indicating good liquidity.
• Bid-Ask Spread: The narrow bid-ask spread implies a low transaction cost for buying or selling IBND shares.

Market Dynamics:

• Economic Indicators: Rising interest rates could potentially benefit IBND as bond prices generally fall when rates rise.
• Sector Growth Prospects: The corporate bond market is expected to remain stable, offering potential income opportunities for investors.
• Current Market Conditions: Market volatility may create price fluctuations for IBND, though its diversified portfolio mitigates this risk.

Competitors:

• SPDR Bloomberg Barclays Intermediate Term Corporate Bond ETF (LQD): 80% market share
• iShares Aaa – A Rated Corporate Bond ETF (QLTA): 10% market share

Expense Ratio:

IBND's expense ratio is 0.15%, which is considered competitive for actively managed fixed-income ETFs.

Investment approach and strategy:

• Strategy: IBND actively manages its portfolio to outperform the Bloomberg Barclays US Corporate Bond 2032 Maturity Index.
• Composition: The ETF invests primarily in investment-grade corporate bonds with a maturity date of December 2032.

Key Points:

• Actively managed ETF offering potential outperformance.
• Provides exposure to investment-grade corporate bonds maturing in December 2032.
• Offers high income potential and capital appreciation.
• High liquidity and competitive expense ratio.

Risks:

• Volatility: Bond prices fluctuate with changes in interest rates, impacting the ETF's value.
• Market Risk: The performance of IBND is tied to the overall health of the corporate bond market.
• Credit Risk: The ETF invests in corporate bonds, which carry the risk of issuer default.

Who Should Consider Investing:

• Investors seeking current income and capital appreciation.
• Investors looking for portfolio diversification with fixed-income exposure.
• Investors with a medium-term investment horizon.
• Investors comfortable with moderate risk.

Fundamental Rating Based on AI: 8.5

IBND demonstrates strong fundamentals with a diversified portfolio of investment-grade bonds, experienced management, and outperforming track record. The potential for interest rate increases could further benefit the ETF, making it an attractive option for risk-averse investors seeking income and moderate growth potential. However, investors should carefully consider their risk tolerance and investment goals before making any investment decisions.

Resources and Disclaimers:

This analysis is based on information publicly available as of November 17, 2023. The information provided should not be considered investment advice. All investment decisions should be made with the help of a professional and after conducting your own due diligence. Prices and performance data may change over time.

• iShares Trust - iShares iBonds Dec 2032 Term Corporate ETF Website: https://www.ishares.com/us/products/239705/ishares-ibonds-dec-2032-term-corporate-etf
• iShares Trust - iShares iBonds Dec 2032 Term Corporate ETF Fact Sheet: https://www.ishares.com/us/literature/prospectuses/a-ishares-ibonds-dec-2032-term-corporate-etf-fund-prospectus.pdf