LQDH vs USIG

LQDHCiShares Interest Rate Hedged Corporate Bond ETF

USIGAiShares Broad USD Investment Grade 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.

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

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

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

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.

• 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

• 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.

• 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 LQDH profile⁠

Full USIG profile⁠