Generally, for a corporate bonds portfolio, what are the common risk factors that's hedge-able through some liquid products?

I know we can hedge the rate-risk through treasuries. We have some ETFs for specific bonds like JNK/HYG/LQD, and certainly the equities of the firms. Are there other liquid proxies I am not aware of, for some certain factors of the risks?

If there aren't a lot of such tradable products, are there some indexes that "tick" more often, so I can gauge the risk through those indexes?


1 Answer 1


You might be able to trade CDX NA IG to hedge your North American investment grade credit spreads, CDX HY to hedge high-yield credit spreads, etc. Here are the Markit indices https://ihsmarkit.com/products/markit-cdx.html , https://www.markit.com/markit.jsp?jsppage=indices.jsp - note that some indices listed here are not liquid. There are some ETFs linked to NA and European indices.


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