LQDH vs SKOR

LQDHCiShares Interest Rate Hedged Corporate Bond ETF

SKORANorthern Trust Credit-Scored US Corporate Bond ETF

In short

LQDH Corporate credit with the rate risk engineered out: LQDH tracks an index that pairs investment grade corporate bonds with interest rate swaps to mitigate duration. Fee is 0.24% net of a waiver through February 28, 2027.

SKOR Most investment-grade corporate bond funds just buy the market. SKOR scores every eligible bond on issuer quality and relative value, then weights toward the winners, and stays in the one-to-under-10-year maturity lane.

Stated mandate

LQDH The fund seeks to track an index designed to reduce the interest-rate risk of a corporate-bond portfolio.

SKOR The Fund seeks to provide pre-fee investment results generally corresponding to the price and yield performance of the Northern Trust US Corporate Bond Quality Value Index.

Why people hold it

• LQDH The hedge is the whole idea. It tracks an index designed to mitigate the interest rate risk of a dollar-denominated investment grade corporate portfolio, leaving credit spread as the main exposure.ishares.comsec.gov
• The swap overlay lives inside the fund, so the rate hedge is handled in the wrapper rather than by you running swaps or futures on the side.ishares.com
• Running since 2014, so this structure has worked through more than one rate cycle instead of arriving in time for the last one.
• Pays monthly, and at 0.24% net (waived down from 0.44% gross through February 28, 2027) the fee sits near the category median for investment grade corporate bond funds.

• SKOR Rules-based scoring, not just size: the index optimizes toward proprietary quality and value scores instead of handing the biggest weight to whoever borrowed the most.sec.gov
• 0.15% net of a waiver through March 1, 2027 (0.16% gross), below the category median and level with the big brand-name corporate bond funds QLTA (0.15%) and LQD (0.14%).
• Tracking has been tight against its index, and it sits in the upper tier of investment-grade corporate bond ETFs on our review.
• Workmanlike plumbing: trading since 2014, over a billion dollars in assets, roughly 1,300 bonds, each issue $250 million or larger, with monthly payouts.sec.gov

Worth knowing

• LQDH The hedge targets interest rates, not credit. Corporate spreads widening still shows up in the price.ishares.com
• It cuts both ways: with duration hedged toward zero, you also give up the price move a long bond portfolio gets when yields fall.ishares.com
• Thinly traded next to the unhedged heavyweights of the corporate bond aisle, which can mean wider bid-ask spreads.

• SKOR Plain-vanilla rivals cost less: SPBO and VTC each charge 0.03%. The scoring screen is what the extra buys.
• Maturities stop short of 10 years, so it skips the long end of the corporate curve and the extra rate sensitivity that comes with it.sec.govflexshares.com
• The record spans two methodologies: the fund switched its objective and underlying index effective April 30, 2020.flexshares.comsec.gov

Full LQDH profile⁠

Full SKOR profile⁠