Corporate bonds

Two options for corporate bond yield and quality

Even though the effects of the ongoing pandemic are slowly dissipating, the risk of default is still apparent when investing in corporate debt issues, which can be resolved with a pair of FlexShares ETFs.

Focus on Debt Quality is available from the comfort of a ETFs packaging with funds like the FlexShares Credit-Scored US Long Corporate Bond Index Fund (LKOR C+). The fund focuses on the longer end of the yield curve, which can be ideal for yield.

LKOR seeks investment results that generally correspond to the price and yield performance, before fees and expenses, of the Northern Trust US Long Corporate Bond Index. The Underlying Index reflects the performance of a broad universe of US dollar-denominated investment grade corporate bonds that can potentially generate a higher total return than the overall investment grade corporate bond market, represented by the Northern Trust US Investment Grade Long Corporate Bond Index.

“The FlexShares Credit-Scored US Long Corporate Bond Index Fund (LKOR) tracks a proprietary index of high-quality debt with maturities of 10 years or more, but with a distinctive twist from Northern Trust’s FlexShares range,” said a ETFs Database analysis said. “The index rates bonds by assessing the value and quality of issuers by examining measures such as creditworthiness, profitability and management efficiency. The index weights the portfolio towards those with the highest scores while those with the worst performance are excluded. Then, to preserve diversification, the methodology limits the weighting of individual bonds, issuers, sectors, duration and turnover.

The intermediate duration can give investors a return, but without the additional rate risk that longer maturities offer. Intermediate exposure to corporate bonds can be achieved with the FlexShares Credit-Scored US Corporate Bond Index Fund (SKOR B).

SKOR seeks investment results that generally correspond to the price and yield performance, before fees and expenses, of the Northern Trust US Corporate Bond Index. The Underlying Index reflects the performance of a broad universe of high quality US dollar-denominated corporate bonds which can potentially generate a higher total return than the overall high quality corporate bond market, as represented. by the Northern Trust US Investment Grade Corporate Bond Index. .

“The FlexShares Credit-Scored US Corporate Bond Index Fund (SKOR) is part of Northern Trust’s significant stable of ETFs built with the firm’s factor investing touch,” said a ETFs Database analysis said. “SKOR tracks a proprietary index that seeks high-quality bonds with maturities between one and ten years. SKOR then uses an internal rating strategy to weight those bonds based on measures of issuer quality and value, such as profitability and creditworthiness.

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