LQDI vs SKOR

LQDIBiShares Inflation Hedged Corporate Bond ETF

SKORANorthern Trust Credit-Scored US Corporate Bond ETF

In short

LQDI Investment-grade corporate credit with a CPI swap stapled on top: LQDI owns a corporate bond fund and overlays inflation swaps to trim inflation sensitivity, at 0.18% net of a waiver through February 29, 2028.

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

LQDI The Fund seeks to track an index intended to reduce inflation risk for a portfolio of U.S. dollar-denominated, investment-grade corporate bonds. It primarily uses an underlying corporate-bond fund and inflation swaps to implement that exposure.

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

• LQDI Rare build in the corporate bond aisle: index exposure to dollar investment-grade corporates plus an inflation swap overlay, instead of credit exposure straight up.ishares.com
• 0.18% net of a waiver through February 29, 2028 (0.33% gross), below the corporate bond category median, and that price includes the swap overlay.
• BlackRock plumbing since 2018: an index mandate, monthly distributions, and one of the stronger implementations in its investment-grade corporate peer group.

• 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

• LQDI The overlay targets inflation only. iShares notes the hedging instruments are not intended to mitigate credit risk, and the swaps put the fund in a commodity pool wrapper.ishares.com
• Inflation swaps reference expected inflation, so the overlay addresses the gap between realized CPI and what the bond market already priced in, not the headline rate.ishares.com
• Small and thinly traded next to the category's giants, 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 LQDI profile⁠

Full SKOR profile⁠