Fixed income markets are evolving with smarter electronic trading protocols, automated investment strategies, and greater availability of useful data. But fixed income indices have yet to adopt many of these advances. That creates a liquidity gap between fixed income indices and the funds that track them.
Discover how a more data-driven approach to indexation — with the new MarketAxess US Investment Grade 400 Corporate Bond Index — can pave the way for improved bond portfolio construction.
Investing involves risk including the risk of loss of principal.
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There can be no assurance that a liquid market will be maintained for ETF shares.
Bonds generally present less short-term risk and volatility than stocks, but contain interest rate risk (as interest rates raise, bond prices usually fall); issuer default risk; issuer credit risk; liquidity risk; and inflation risk. These effects are usually pronounced for longer-term securities. Any fixed income security sold or redeemed prior to maturity may be subject to a substantial gain or loss.
The value of the debt securities may increase or decrease as a result of the following: market fluctuations, increases in interest rates, inability of issuers to repay principal and interest or illiquidity in the debt securities markets; the risk of low rates of return due to reinvestment of securities during periods of falling interest rates or repayment by issuers with higher coupon or interest rates; and/or the risk of low income due to falling interest rates. To the extent that interest rates rise, certain underlying obligations may be paid off substantially slower than originally anticipated and the value of those securities may fall sharply. This may result in a reduction in income from debt securities income.
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