Credit ratings are one of the important measures for bond investors since these ratings are assessments of the creditworthiness of a borrower, such as a corporation, government, or a specific financial instrument like a bond. These ratings are assigned by privately owned credit rating agencies such as S&P Global, Moody’s, Fitch Ratings, or Scope. They indicate the likelihood that the issuer will meet its debt obligations (interest and principal payments) in full and on time. As a result, credit ratings help investors evaluate default risk, guide interest rates, and influence borrowing costs for bond issuers. More generally speaking, ratings range

Within the current macroeconomic environment where central banks around globe have started to lower interest rates, bond funds and ETFs have become popular investment choices for all kinds of investors. However, their performance is influenced by a variety of risk and return factors that investors need to understand. The first to mention is obviously the interest rate risk. Every investor should bear in mind that bond prices and interest rates move inversely, meaning rising rates can lead to losses, while falling rates increase bond values. A measure to determine the degree of a bond fund’s sensitivity to interest rate changes

Corporate investment-grade debt funds (including both conventional mutual funds and ETFs) have suffered $113.8 billion in year-to-date outflows. This figure would already break the annual outflow record by nearly $100 billion. Investment grade (IG) corporate debt funds broke their all-time calendar year records during their 2020 and 2021 campaign (+$266.7 billion and +$274.4 billion, respectively). If the tides do not turn quickly, IG funds will only log their second calendar year outflow. While recent performance may be trending upward, year-to-date performance has been dismal. Lipper Corporate Debt A-Rated Funds have realized a negative 11.06%, while Lipper Short Investment Grade Debt