The yield on the iShares Interest Rate Hedged Corporate Bond ETF (LQDH) is lower than that of its parent, the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD); that’s primarily due to the ‘yield’ or cost of being short interest rates via the swaps. Yet it’s still higher than the short-maturity and floating rate ETFs,” according to BlackRock.
LQDH has a 30-day SEC yield of 3.62% compared to 4.13% on the unhedged LQD. LQDH charges 0.24% per year, or $24 on a $10,000 investment, which is favorable among actively-managed ETFs.
For more trends in fixed income, visit the Rising Rates Channel.