BlackRock’s (NYSE: BLK) iShares unit, the world’s largest issuer of exchange traded funds, has introduced four new bond ETFs, including two corporate bond funds that feature interest rate hedging strategies.
The actively managed iShares Interest Rate Hedged Corporate Bond ETF (NYSEArca: LQDH) holds a position in the iShares iBoxx $ Investment Grade Corporate Bond ETF (NYESArca: LQD) and shorts Treasuries in an effort to mute interest rate risk.
LQD, the largest corporate bond ETF with $17.7 billion in assets under management, debuted in 2002 as the first bond ETF to list in the U.S. LQDH features an annual expense ratio of 0.45%, according to iShares data.
LQDH has a high-yield equivalent in the form of the iShares Interest Rate Hedged High Yield Bond ETF (NYSEArca: HYGH). HYGH, which is also actively managed, holds a long position in the iShares iBoxx $ High Yield Corporate Bond ETF (NYSEArca: HYG) while also shorting Treasuries.
HYGH charges 1.15% per years, according to iShares data.