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.

ProShares High Yield-Interest Rate Hedged ETF

ProShares Investment Grade-Interest Rate Hedged

“Rate-hedged” bond funds can make money when interest rates rise and bond prices fall.

These ETFs can be your insurance against Fed hikes and rising rates

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)

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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?

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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

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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)