iShares iBoxx $ Investment Grade Corporate Bond ETF

iShares Interest Rate Hedged Corporate Bond ETF

LQDH tracks an index that holds iShares iBoxx USD Investment Grade Corporate Bond ETF (LQD), which targets USD-denominated investment corporate bonds, while mitigating duration risk.

We initially rated LQDH a 'Sell' due to its zero duration profile, making it less beneficial in a falling rate environment. LQD outperformed LQDH by 4% as expected as the Fed announced its intent to cut Fed Funds. LQD benefited from lower intermediate rates, confirming our initial thesis. With the yield curve shift largely behind us, we are upgrading LQDH to 'Hold', anticipating similar performance to LQD in a range-bound rate environment.

LQDH: Checking In On Hedged Investment Grade Bonds (Rating Upgrade)

LQDH is an interest rate hedged investment-grade corporate bond index ETF managed by BlackRock. It provides investors with diversified exposure to investment-grade corporate bonds, and uses swaps to hedge its interest rate risk. It has significantly outperformed its peers since inception, and with lower risk and volatility.

LQDH: Investment-Grade Bond ETF, Interest Rate Hedged, Good 6.6% Yield

The best time to buy insurance is when whatever it is you're insuring against is considered unlikely. So, should you hedge your bond portfolio against rising interest rates?

How to immunize your bond ETF if interest rates turn back up

iShares Interest Rate Hedged Corporate Bond ETF is a fixed income ETF that hedges against rising interest rates. LQDH isolates corporate credit spreads and gains when spreads tighten, but loses value when spreads widen. Investment grade corporate spreads are currently at historic lows, indicating a potential future widening and lower NAV for LQDH.

LQDH: A Corporate Spreads Play (Rating Downgrade)

PIMCO Investment Grade Corporate Bond ETF

Aptus Defined Risk ETF

Fidelity Corporate Bond ETF

Franklin Investment Grade Corporate ETF

Goldman Sachs Access Investment Grade Corporate Bond ETF

Inspire Corporate Bond Impact ETF

Principal Investment Grade Corporate Active ETF

iShares Interest Rate Hedged Long-Term Corporate Bond ETF

iShares Investment Grade Bond Factor ETF

iShares 5-10 Year Investment Grade Corporate Bond ETF

John Hancock Corporate Bond ETF

American Century Diversified Corporate Bond ETF

FlexShares Credit-Scored US Long Corporate Bond Index Fund

iShares BBB Rated Corporate Bond ETF

iShares Inflation Hedged Corporate Bond ETF

Mobeus Income & Growth 2 VCT PLC

Invesco Fundamental Investment Grade Corporate Bond ETF

iShares Aaa-A Rated Corporate Bond ETF

Schwab 5-10 Year Corporate Bond ETF

FlexShares Credit-Scored US Corporate Bond Index Fund

SPDR Portfolio Corporate Bond

M&A was almost dormant in 2023. In the US, as a proportion of the market value of the benchmark equity indices, it fell to its lowest level in 20 years, according to McKinsey. Credit investors are not traditionally supposed to be fans of M&A, and it's true we are wary of leveraging M&A, where debt is loaded onto balance sheets to buy competitors. We are seeing a comeback for M&A that we think is likely to continue through 2024.

The Credit Opportunity In M&A

Bond funds that hedge interest rate risk have performed better than those that don't in recent years. The iShares Interest Rate Hedged Corporate Bond ETF is a cost-effective option for investors seeking interest rate hedged exposure to investment-grade corporate bonds. The LQDH ETF offers a unique blend of features, including investment-grade corporate bond exposure with interest rate hedging, setting it apart from similar ETFs.

LQDH: A Hedge For The Fed Not Pivoting

The iShares Interest Rate Hedged Corporate Bond ETF tracks a diversified portfolio of U.S. dollar-denominated investment grade corporate bonds. The fund hedges out interest rate risk by owning the iShares iBoxx $ Investment Grade Corporate Bond ETF and a portfolio of interest rate swaps. The LQDH ETF has delivered strong returns in the past year, but investors should not expect the same level of returns going forward.

LQDH: What Explains The ETF's Outperformance?

Breakwave Dry Bulk Shipping ETF

MicroSectors U.S. Big Banks Index -3X Inverse Leveraged ETN

United States Brent Oil Fund LP

iShares Interest Rate Hedged High Yield Bond ETF

Renaissance IPO ETF

Invesco KBW Bank ETF

Simplify Interest Rate Hedge ETF

Invesco Dynamic Oil & Gas Services ETF

Advocate Rising Rate Hedge ETF

Global X Uranium ETF

Sprott Uranium Miners ETF

These are the top ETF events in the month of September that could be under watch in October.

LQDH: Credit Spreads Probably Too Low

The iShares Interest Rate Hedged Corporate Bond ETF is a fixed-income exchange-traded fund. The vehicle seeks to track the investment results of an index designed to mitigate the interest rate risk of a portfolio composed of U.S. dollar-denominated, investment-grade corporate bonds.

LQDH Will Likely Underperform In A Decreasing Rate Environment

Vanguard Long-Term Treasury ETF

To hedge or not to hedge?

Bond funds that don't lose money when interest rates rise? Sounds too good to be true, doesn't it?

News for iShares Interest Rate Hedged Corporate Bond ETF ETF (LQDH)