The fund may also invest in other ETFs, U.S. government securities, futures, options and swap contracts, short-term paper, cash and cash equivalents. LQDI currently includes a hefty 97.4% position in iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSEArca: LQD), the largest investment-grade corporate bond-related ETF on the market, along with 7.9% in a money market fund and smaller positions in swaps.
Through its investment methodology, the new ETF will help diminish exposure to inflation risk while maintainining exposure to real rate and credit risk. Investors are basically getting LQD exposure but they are also protected against rising inflation expectations.
LQDI currently shows an effective duration of 7.87 years and a 4.06% 30-day SEC yield.
For more information on new fund products, visit our new ETFs category.