LQD vs SPBO

LQDAiShares iBoxx $ Investment Grade Corporate Bond ETF

SPBOAState Street SPDR Portfolio Corporate Bond ETF

In short

LQD One of the first bond ETFs ever launched (2002) and still the ticker traders reach for on corporate credit. Its index takes only big, widely held investment-grade bonds, so you own the liquid end of the market.

SPBO The whole investment-grade corporate bond market in one ticker for three basis points. Most rivals sell you a maturity slice; SPBO owns the lot, and it undercuts other funds tracking the very same Bloomberg index.

Stated mandate

LQD The fund seeks to track an index of U.S. dollar-denominated investment-grade corporate bonds.

SPBO The fund seeks investment results that generally correspond, before fees and expenses, to the price and yield performance of the Bloomberg U.S. Corporate Bond Index.

Why people hold it

• LQD Costs 0.14% a year, under the 0.19% median for investment-grade corporate bond funds in its group.
• The index is a liquidity filter: bonds need $750M+ outstanding from issuers with $2B+ of debt, and no single issuer gets more than 3% of the basket.ihs.com
• Running since 2002 and now a multi-billion-dollar fund that trades heavily, so getting in and out is rarely the hard part.
• Tracks its benchmark closely, which is the entire job of an index bond fund, and pays interest monthly.

• SPBO 0.03% a year against a category median of 0.19%. In bond land, where the yield does the heavy lifting, that fee gap is not a rounding error.
• Thousands of corporate bonds across the full maturity range, so you hold the broad IG corporate market instead of one duration bucket.ssga.com
• Same index, very different tolls: KORP charges 0.29%, JLQD 0.35%, JHCB 0.53%. SPBO sits at the cheap end of that list.
• Running since 2011, pays monthly, and tracks its benchmark about as closely as anything in the investment-grade corporate group.

Worth knowing

• LQD Rivals run cheaper: VCIT, USIG, SPIB, IGIB and IGSB all charge 0.03% to 0.04%. You pay up here for the liquid-index rules and the trading depth.
• The index holds bonds with at least three years left and no maturity ceiling, so long-dated debt is in the mix and prices swing more when rates move.ihs.com
• This is corporate credit, not Treasuries. The rating floor is the bottom rung of investment grade (BBB-/Baa3), so credit spreads are part of the ride.ihs.com

• SPBO Full maturity range means long-dated paper is in the mix, so the price moves more when rates move than short-maturity peers like IGSB or SPIB.
• Corporate credit only. No Treasuries or mortgages to lean on, so the fund rides the health of corporate borrowers as well as the rate cycle.ssga.com
• Investment grade by design, US issuers only. No high-yield or emerging-market bonds in the basket.

Full LQD profile⁠

Full SPBO profile⁠