Corporate Bond ETF (CORP) Hits a New 52-Week High

Sweta Jaiswal, FRM
·2 min read

For investors looking for momentum, PIMCO Investment Grade Corporate Bond Index ETF CORP is probably a suitable pick. The fund just hit a 52-week high and is up 25% from its 52-week low price of $92.44/share.

Let’s take a look at the fund and its near-term outlook to gain an insight into where it might be headed:

CORP in Focus

This ETF seeks to provide total return that closely corresponds, before fees and expenses, to the total return of The BofA Merrill Lynch US Corporate Index. It has AUM of $665.1 million and charges 20 basis points (bps) in annual fees.

Why the Move?

The Federal Reserve has announced new initiatives to support the ailing U.S. economy. The central bank has pledged to make individual corporate bonds purchases under its Secondary Market Corporate Credit Facility (SMCCF), adding liquidity to the market. Notably, under the SMCCF emergency lending program that has a capacity of $250 billion, the Fed has invested about $5.5 billion in ETFs that buy corporate bonds. The Fed has pledged to keep pumping in stimulus to support the economy and strengthen it. These factors are making funds like CORP attractive investment options. Also, the coronavirus-induced global economic concerns might spur demand among investors.

More Gains Ahead?

It seems like the fund will remain strong, with a positive weighted alpha of 9.00, which gives cues of further rally.

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PIMCO Investment Grade Corporate Bond Index ETF (CORP): ETF Research Reports
 
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