LQDH vs VTC

LQDHCiShares Interest Rate Hedged Corporate Bond ETF

VTCAVanguard Total 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.

VTC Most cheap corporate bond funds sell you one slice of the maturity curve. VTC buys the whole investment-grade corporate market, short to long, for 0.03% a year, and since 2025 it owns the bonds directly instead of stacking three Vanguard funds.

Stated mandate

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

VTC The Fund seeks to track a broad, market-weighted corporate bond index, specifically the Bloomberg U.S. Corporate Bond Index. It uses an indexing approach focused on investment-grade, fixed-rate, taxable 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.

• VTC 0.03% a year against a 0.19% median for investment-grade corporate ETFs. On this exact Bloomberg index, nothing in the group charges less.
• One ticker, the full corporate curve. Top-graded rivals like VCIT, IGIB and IGSB each buy a single maturity band; VTC's index spans short, intermediate and long fixed-rate corporates.
• No overlays, no active tilts, no credit guesswork. Market-weighted indexing of investment-grade, fixed-rate, taxable corporates, and the portfolio hews tightly to that mandate.
• Income lands monthly, not quarterly, which matters if bond coupons are doing real work in your cash flow.

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.

• VTC Whole-curve means long bonds in the mix, so prices move more with interest rates than a 1-5 year slice like IGSB does.
• The plumbing changed in March 2025: Vanguard moved it from holding three underlying corporate bond ETFs to buying the index bonds directly. Same objective, same index.sec.gov
• Moderately traded rather than a volume heavyweight, so spreads can run wider than the busiest corporate bond funds, particularly in choppy markets.

Full LQDH profile⁠

Full VTC profile⁠