How do the expense ratios of LQD and LQDH differ and what does this mean?

LQD (stock_1) carries a 0.14% expense ratio, while LQDH (stock_2) has a 0.24% ratio, making the latter 0.10 percentage points higher. A higher expense ratio reduces net returns over time because fees are deducted from the fund's assets. When comparing these two investment grade corporate bond ETFs, investors should consider that LQDH's additional costs may impact long-term performance relative to LQD.

What does currency hedging mean and why is it relevant to LQDH?

Currency hedging protects investors from exchange rate fluctuations. LQDH (stock_2) implements a hedging overlay to mitigate US dollar risk, making it more suitable for global investors seeking stable income in their home currency. In contrast, LQD (stock_1) does not hedge currency, which means its returns are more exposed to movements in the US dollar against other currencies.

How do the net assets of LQD and LQDH compare and what does this indicate?

LQD (stock_1) has $27.5 billion in net assets, reflecting its deep liquidity and institutional use. In comparison, LQDH (stock_2) holds $577 million, which is substantially smaller. Larger net assets typically result in tighter bid-ask spreads, making trading easier. LQDH's smaller size might lead to slightly wider spreads and reduced trading flexibility for investors.

What are the dividend yields for LQD and LQDH, and how do they differ?

LQD (stock_1) offers a 4.77% dividend yield, while LQDH (stock_2) provides a higher 5.80% yield. This difference reflects variations in income distributions, potentially due to hedging costs or structural differences in how the funds generate returns. Investors should consider that the yield alone does not dictate total returns, which also include capital appreciation and market conditions.

What are the main investment strategies associated with LQD and LQDH?

LQD (stock_1) focuses on investment grade corporate bonds, providing a broad market exposure to high-quality debt securities. LQDH (stock_2) mirrors this strategy but includes currency hedging to reduce exchange rate risk for global investors. Both ETFs aim to deliver income through corporate bond holdings, with LQDH adding a layer of management through its 93.74% weighting in LQD.

Which fund has a more mature track record and why does this matter?

LQD (stock_1) has been active since July 2002, giving it a longer and more established track record compared to LQDH (stock_2), which was established in May 2014. A mature history provides more data points for analysis and can indicate robustness over various market cycles. LQDH's shorter track record might mean limited evidence to assess long-term performance.

What are the implications of LQDH holding 93.74% of its assets in LQD?

LQDH (stock_2) holds 93.74% of its assets in LQD (stock_1), creating a second layer of management costs. While this structure allows LQDH to leverage LQD's corporate bond exposure, it introduces additional complexity and cost compared to investing directly in LQD. Investors might pay more overall when accessing LQD through a fund that holds it directly.

What are the top holdings of LQD and LQDH and how transparent are they?

The top holdings for both LQD (stock_1) and LQDH (stock_2) are not available. This lack of transparency limits the immediate visibility into their specific bond exposures. LQDH does list a 93.74% weighting in LQD, but neither fund provides detailed holdings or sector weights, which can hinder precise risk assessment.

Why might LQDH's currency hedging make it suitable for non-US investors?

LQDH (stock_2) employs a currency hedging overlay to mitigate the US dollar risk, making it more suitable for non-US investors seeking income. This hedging helps stabilise returns in the investor's home currency, although it comes at the cost of a higher expense ratio. It is often used by investors concerned about exchange rate fluctuations impacting their investments.

What is a key drawback of LQDH's smaller net assets?

LQDH (stock_2) has $577 million in net assets, which may lead to wider bid-ask spreads. Smaller net assets often mean lower liquidity, making it potentially more difficult and costly to trade compared to LQD (stock_1), which boasts $27.5 billion in net assets. Investors might face higher transaction costs when dealing with lower liquidity ETFs.

LQD vs LQDH

Two funds, one decision: we compare cost, performance and what each ETF actually holds in September 2026.

Compare iShares iBoxx $ Investment Grade Corp Bond ETF (LQD) and ISHARES INT HEDG CORP BD ETF (LQDH). This page reviews fees, holdings, dividends and how each fund tracks its market. LQD has a 0.14% expense ratio; LQDH has 0.24% and holds LQD at 93.74%. Yields are 4.77% and 5.80%. Index focus is not available for either. Educational content, not financial advice.

Compare iShares iBoxx $ Investment Grade Corp Bond ETF (LQD) and ISHARES INT HEDG CORP BD ETF (LQDH). This page reviews fees, holdings, dividends and how each fund tracks its market. LQD has a 0.14% e...

Fund Snapshot

Key Fund Metrics

LQD

Metric

LQDH

0.14%

Expense Ratio

0.24%

4.77%

Dividend Yield

5.80%

$27.54B

Net Assets

$576.51M

3,172

Holdings

214

Jul 22, 2002

Inception Date

May 27, 2014

–

Index Tracked

–

Corporate Bond

Fund Category

Ultrashort Bond

LQD costs about $10.00 less per year for every $10,000 invested.

Shared Top Holdings

These funds do not share any of their top holdings.

Discover More Comparisons

LQD vs USIG

Compare LQD and USIG ETFs. Review expense ratios of 0.14% vs 0.04%, dividend yields, shared holdings, and tracking methods for these corporate bond funds.

LQD vs VCIT

Compare LQD and VCIT ETFs on fees, dividends, and holdings. LQD charges 0.14%; VCIT costs 0.03%. Analyze tracking and yield for these corporate bond funds.

IGBH vs LQDH

Compare IGBH and LQDH on fees, dividends, holdings and tracking. Review expense ratios of 0.14% versus 0.24% and yields to understand key fund differences.

Investment Analysis

LQD

Pros

Low 0.14% expense ratio aids long-term total return for this core corporate bond ETF.
Massive $27.5 billion net assets support deep liquidity and tight trading spreads.
Long history since July 2002 provides a mature track record for institutional use.

Considerations

4.77% dividend yield is lower than the currency-hedged alternative's current income.
Currency risk for non-USD investors as the fund lacks any hedging overlay.
Top holdings and sector weights are not available, limiting immediate transparency.

LQDH

Pros

Currency hedging mitigates US dollar risk for global investors seeking income.
5.80% dividend yield currently exceeds the unhedged base ETF's distribution rate.
Low 0.24% expense ratio remains competitive for an international corporate bond fund.

Considerations

Small $577 million net assets may result in wider bid-ask spreads.
93.74% weighting in LQD adds a second layer of management costs.
Shorter track record since May 2014 offers less historical data for analysis.

Related Market Insights

Interest Rate Volatility: The Trading Bonanza Nobody's Talking About

Discover how to profit from surging interest rate volatility. Explore market makers & exchanges like CME, CBOE, Virtu. Invest in the Interest Rate Volatility Neme on Nemo.

Aimee Silverwood | Financial Analyst

1 November 2025

Read Insight

Related Market Insights

Interest Rate Volatility: The Trading Bonanza Nobody's Talking About

Discover how to profit from surging interest rate volatility. Explore market makers & exchanges like CME, CBOE, Virtu. Invest in the Interest Rate Volatility Neme on Nemo.

Aimee Silverwood | Financial Analyst

1 November 2025

Read Insight

About LQD and LQDH

LQD (LQD)

This ETF provides broad access to the USD investment-grade corporate bond market, aiming to track its overall performance. With net assets of approximately USD 27.54 billion and a low expense ratio of 0.14%, it offers a diversified portfolio holding over 3,000 individual bonds. The fund is designed for investors seeking exposure to the fixed-income market, particularly those looking to complement equity holdings with debt securities. Currently, it offers a dividend yield of 4.77%, reflecting interest income from the underlying bonds. Investors should be aware that, like all fixed-income funds, its value can fluctuate due to changes in interest rates and credit conditions. It is essential to consider personal financial goals and risk tolerance before investing, as capital is not guaranteed.

LQDH (LQDH)

Which Baskets Do They Appear In?

Interest Rate Volatility: What's Next for Trading?

The U.S. Treasury's announcement of its borrowing plans is set to influence bond supply and yields across the financial markets. This creates a potential investment opportunity focused on companies and sectors that are positioned to benefit from increased interest rate volatility and shifts in the broader economy.

Published: 1 November 2025

Explore Basket