Investors today face a challenge: sacrifice income, or take on more risk.
Investment grade corporate bonds can provide higher yields versus Treasury bonds, however over the past decade corporate leverage has increased while credit spreads have declined.
Introducing a smarter approach to corporate credit:
VanEck Vectors Moody’s Analytics IG Corporate Bond ETF (MIG)
VanEck Vectors Moody’s Analytics BBB Corporate Bond ETF (MBBB).
MIG and MBBB use a forward looking assessment of risk and value that hundreds of the world’s largest institutional investors have relied on for decades.
The fair value of each bond is calculated daily through a process that is based on decades of corporate credit risk research, and is driven by market-based information like a company’s stock price, as well as its balance sheet information and many other inputs.
Bonds with similar credit ratings and maturities can have very different fair values. This process can identify bonds that are undervalued relative to their risk that may also offer attractive yields and upside potential, as the market recognizes the true value of these bonds over time.
At the same time, these strategies aim to avoid bonds which are overpriced or expected to decline in value in the future, due to a forecasted decline in credit quality or a downgrade to high yield.
The U.S. investment grade corporate bond market is vast. Owning the entire market means owning bonds that may be overpriced or have hidden risk. With the right tools, it’s possible to identify the most attractively valued bonds that may provide attractive yield and potential upside, while avoiding the rest.
MIG provides exposure to the most attractively valued bonds from the broad investment grade market, while MBBB, focuses on the BBB rated segment, and both avoid bonds most at risk of being downgraded to high yield, providing investors with attractive yield, without having to take on more risk.
To Learn more visit vaneck.com/corporatecredit
- - - - - - - - - -
This material does not constitute an offer to sell or solicitation to buy any security, including shares of the VanEck Vectors Moody’s Analytics IG Corporate Bond ETF or VanEck Vectors Moody’s Analytics BBB Corporate Bond ETF (together the “Funds”). An offer or solicitation will be made only through a fund’s prospectus or summary prospectus and will be subject to the terms and conditions contained therein The information presented does not involve the rendering of personalized investment, financial, legal, or tax advice. Certain statements contained herein may constitute projections, forecasts and other forward looking statements, which do not reflect actual results, are valid as of the date of this communication and subject to change without notice. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. The information herein represents the opinion of the author(s), but not necessarily those of VanEck.
Non-VanEck proprietary information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of VanEck.
An investment in the VanEck Vectors Moody’s Analytics IG Corporate Bond ETF (MIG) and VanEck Vectors Moody’s Analytics BBB Corporate Bond ETF (MBBB ) may be subject to risks which include, among others, investing in European issuers, foreign securities, foreign currency, BBB-rated bond, credit, interest rate, liquidity, restricted securities, consumer staples sector, financials sector, energy sector, communication services sector, market, operational, high portfolio turnover, call, sampling, index tracking, authorized participant concentration, new fund, absence of prior active market, trading issues, passive management, data, non-diversified, concentration and trading, premium/discount and liquidity of fund shares risks. The Funds’ assets may be concentrated in a particular sector and may be subject to more risk than investments in a diverse group of sectors. Bonds and bond funds are subject to interest rate risks and will decline in value as interest rates rise.
The Adviser has entered into a licensing agreement with Moody's Analytics to use certain Moody's Analytics credit risk models, data and trademarks. Moody’s Analytics® is a registered trademark of Moody’s Analytics, Inc. and/or its affiliates and is used under license.
The Funds are not sponsored, promoted, sold or supported in any manner by Moody’s Analytics nor does Moody’s Analytics offer any express or implicit guarantee or assurance either with regard to the results of using the Moody’s Analytics trademark or data at any time or in any other respect. Moody’s Analytics has no obligation to point out errors in the data to third parties including but not limited to investors and/or financial intermediaries of the Funds. The licensing of data or the Moody’s Analytics trademark for the purpose of use in connection with the Funds does not constitutes a recommendation by Moody’s Analytics to invest capital in the Funds nor does it in any way represent an assurance or opinion of Moody’s Analytics with regard to any investment in this financial instrument. Moody’s Analytics bears no liability with respect to the Funds or any security.
Investing involves substantial risk and high volatility, including possible loss of principal. Bonds and bond funds will decrease in value as interest rates rise. An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. To obtain a prospectus and summary prospectus, which contains this and other information 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.
Van Eck Securities Corporation, Distributor, 666 Third Avenue, New York, NY 10017
© 2021 VanEck.