Investment Grade Corporate Bonds
Investment grade corporate bonds represent the broad market for high-quality corporate bonds in the United States.
Bond rating firms classify the ability of a company to pay back its debt using letter grades. Investment grade bonds typically range from AAA (the highest rating) to BBB (for medium credit quality). These companies are considered very trustworthy and unlikely to default on their debt.
Investment grade bonds can be purchased in many different maturities, but the funds on this site focus on intermediate bonds with an average maturity of about 7 years.
- 1970-1972: Longinvest’s bonds fund spreadsheet (10-2 model), R*
- 1973-1998: Barclays US Corporate Investment Grade TR USD, P
- 1999-2009: Bloomberg Barclays US Credit Corporate 5-10 Year TR USD, P
- 2010+: Vanguard Intermediate Term Corporate Bond Index Fund (VCIT), P
(*) Good data for investment grade corporate bonds is not available before 1973. Prior to that, I use an intermediate treasury model as a replacement asset. Investment grade corporate bonds do not vary too far from similarly high grade treasuries, so the error is reasonably low and moderate amounts of IGC will work fine in the calculators.
Portfolios with Investment Grade Corporate assets