'Safe' Bond ETFs Can Offer Increased Triple B Bond Risk

The video discusses the risks associated with investment grade bonds, particularly focusing on ETFs like LQD and their exposure to Triple B-rated bonds. It explores options for investors looking to reduce their exposure to these bonds, such as investing in Q LTA or actively managed ETFs. The video also covers the concept of Fallen Angel bonds, which are downgraded from investment grade to high yield, and their performance in the market.

What is the significance of the increase in Triple B allocations in investment grade ETFs like iShares LQD?

• It shows a trend of corporations issuing more debt.

• It suggests a higher yield potential.

• It reflects a shift towards higher quality bonds.

• It indicates a decrease in overall risk.

Which ETF is designed to avoid exposure to Triple B bonds?

• iShares IGB

• iShares LQD

• iShares QLTA

• Fallen Angel ETF

What is a potential benefit of investing in actively managed fixed income ETFs?

• Lower management fees

• No exposure to Triple B bonds

• Access to credit analysts for better bond selection

• Guaranteed higher returns

What are Fallen Angel bonds?

• Bonds with the highest credit rating

• Bonds downgraded from investment grade to high yield

• Bonds that have defaulted

• Bonds upgraded from high yield to investment grade

Why might Fallen Angel bonds be sold below their perceived value?

• Due to high demand from investors

• Because they are mandated to be held by institutions

• Due to their high credit rating

• Because institutions are required to sell them after downgrade