LQDB vs USIG

LQDBAiShares BBB Rated Corporate Bond ETF

USIGAiShares Broad USD Investment Grade Corporate Bond ETF

In short

LQDB Most investment-grade bond funds blend AAA through BBB. LQDB keeps only the BBB rung, the biggest and lowest-rated slice of the IG market, in one index fund of roughly 1,700 bonds that pays monthly.

USIG Most investment-grade corporate bond funds hand you one slice of the maturity curve. USIG takes the whole thing, thousands of US dollar corporate bonds from short-dated to long, for four basis points a year.

Stated mandate

LQDB The fund seeks to track an index containing U.S. dollar-denominated corporate bonds rated BBB.

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

Why people hold it

• LQDB Pure-play BBB. It tracks an index of dollar-denominated BBB corporate bonds only, with no A or AAA paper watering down the credit exposure.ishares.com
• 0.15% a year, under the median fee in its investment-grade corporate peer group.
• Roughly 1,700 bonds behind one ticker, with income paid monthly rather than quarterly.
• Tracking has hugged the benchmark closely, one of the cleaner index implementations in its group.

• USIG Costs 0.04% a year, against a category median near 0.19%. CORP, which tracks the same ICE BofA US Corporate Index, charges 0.41%.
• One ticker, the full USD investment-grade corporate curve: thousands of bonds, short to long. Slice funds like IGSB (1-5 year) and IGIB (5-10 year) each cover one segment.ishares.com
• Running since 2007, it has tracked its index with very little drift and is one of the more actively traded funds in its category.
• Interest lands monthly, and this is a multi-billion-dollar fund that ranks among the strongest implementations in its peer group.

Worth knowing

• LQDB BBB is the last rung before high yield, so this concentrates the most downgrade-sensitive slice of investment grade instead of spreading across the ratings ladder.
• Small asset base and light trading volume, so bid-ask spreads can run wider than on the giant core bond ETFs.
• Broad IG funds like VCIT and USIG charge a few basis points, so the BBB-only tilt costs more than plain-vanilla corporate exposure.

• USIG Owning the whole curve means long-dated bonds ride along, so the price swings more when rates move than a short-maturity slice such as IGSB.
• This is corporate credit, not Treasuries. Investment grade at purchase, but prices can fall when spreads widen or an issuer is downgraded.ishares.com
• VCIT edges it on fee at 0.03%, though that fund stays in intermediate maturities rather than the full curve.

Full LQDB profile⁠

Full USIG profile⁠