FYI: Interest-rate risk has a much bigger impact on most core investment-grade bond portfolios than anything else. It explains 88% of the Bloomberg Barclays U.S. Aggregate Bond Index’s returns over the trailing 10 years through August 2019. That’s not necessarily a problem. The payoff to interest-rate risk is counter-cyclical because rates tend to rise during economic expansions and fall during recessions (lower rates lead to higher bond prices). So, interest-rate risk can help diversify stock risk. However, investors who are looking to balance the sources of risk in their bond portfolios might consider iShares Edge U.S. Fixed Income Balanced Risk ETF (FIBR). This could serve as a stand-alone core bond allocation, but it probably won’t diversify stock risk as well as an Aggregate Index tracker.
Regards,
Ted
https://www.morningstar.com/articles/952644/balance-credit-and-rate-risk-with-this-bond-etf
