Today's bond market looks very different from what we've seen over the past few years. Yields are still relatively high. Inflation is still very sticky, and financial conditions are tighter despite monetary policy easing over the last few days as the Fed mentioned that it will begin buying short-term treasuries. All of this creates both opportunities and challenges for credit investors. If you're looking to lock in attractive yields, we believe in high-quality intermediate corporate bonds are worth a closer look.

But because spreads are still very tight, we believe being selective is fundamental.

At VanEck, we believe in a smarter approach to corporate credit, one that focuses on income and total return potential while staying disciplined and forward-looking.

We're in a very different fixed income world right now. Yields and high-quality corporate bonds have increased, creating opportunities investors haven't seen in a while. For anyone seeking income, retirees, income-oriented investors, or those building a core bond allocation, these higher yields can make a manifold difference in both cash flow and long-term returns.

But higher yields in investment grade don't mean every bond is worth buying, as not all bonds in this big universe are going to be offering the same trade-off between risk and reward. That's why selectivity matters now more than ever.

Finding Yield today is not just about buying bonds, it's about buying the right bonds.

Key Drivers of Real Yield Opportunities Today

We think there's two drivers of real yield opportunities right now.

First one is how bond is priced and the second one is how much credit risk that bond is actually carrying. If we look at valuation first, not all bonds in investment greater or even bonds within the same rating offer the same value. Some bonds are going to be paying very little extra yield, while others are going to be paying a lot, even though their fundamentals can be very similar. And for investors, that is creating an attractive opportunity right now.

The second thing we looked at is credit risk. A high yield doesn't automatically make a bond attractive. Some bonds in the vast universe may look cheap because their credit quality is deteriorating. But if bonds are not really overcompensating you for the risk you're taking, it may not be worth buying it. At the end of the day, we believe that the bigger driver of returns is getting paid appropriately for the risk you're taking. So identifying those bonds that are actually paying you and avoiding those that are not paying enough for the risk is what really shaping your opportunities today in the investment grade space.

MIG |VanEck Moody's Analytics IG Corporate Bond ETF

This is where the VanEck Moody's Analytics IG Corporate Bond ETF, ticker MIG, and the VanEck Moody's Analytics BBB Corporate Bond ETF, ticker MBBB, come into play. Both funds use the Moody's Analytics credit models to identify those bonds that are attractively valued relative to the risk. Instead of owning the entire corporate bond market, they focus on those bonds that offer more reward for the amount of risk they carry.

MBBB |VanEck Moody's Analytics BBB Corporate Bond ETF

MIG is going to invest across the investment-grade corporate bond market, while MBBB is only going to be focusing on the BBB-rated corporates. Because the process between these two funds is selective and is data-driven, the goal for these two funds is very clear. We're looking to deliver smart yield by combining income potential with valuation discipline and credit quality.

If you're thinking about adding income to your portfolio, either as a core bond position or as a part of a broader income solution, MIG or MBBB can offer a disciplined way to access corporate bond yields.

MIG is going to invest in the most attractively valued bonds in the U.S. investment grade space, while MBBB applies the same approach, but is only going to focus on the BBB market.

Higher yields in investment grade can be compelling, but we believe that focusing on quality, valuation, and discipline can help balance opportunity with risk.

To learn more about these funds and to explore additional insights on today's market environment, you can visit VanEck.com.