iShares Industrials Bond ETF
Want to participate in the strength of America’s returning industrial might, but still unsure about just how far the stock market has risen over the last year or so? Then the iShares Industrials Bond ETF (ENGN) could be for you.
Cute ticker aside, ENGN is a unique offering from BlackRock’s (BLK) iShares unit that hones in on bonds issued by various American industrial firms — nearly 278 bonds in total.
Those 278 bonds are all rated investment grade. Perhaps more importantly, ENGN’s effective duration is near the sweet spot — around 5 to 6 years. Analysts estimate that a duration of 5 to 6 provides the best combination of current yield and compensation for potentially rising interest rates. Since bond prices have a negative correlation to rising interest rates, the longer the duration, the more the bond will fall when interest rates rise.
ENGN currently has a monthly distribution yield of 3.05%. Expenses for the ETF run just 0.30%.