LQDH - LQDH: A Corporate Spreads Play (Rating Downgrade)
2024-03-18 22:22:29 ET
Summary
- iShares Interest Rate Hedged Corporate Bond ETF is a fixed income ETF that hedges against rising interest rates.
- LQDH isolates corporate credit spreads and gains when spreads tighten, but loses value when spreads widen.
- Investment grade corporate spreads are currently at historic lows, indicating a potential future widening and lower NAV for LQDH.
- LQDH achieves a zero duration interest risk profile via a laddered IRS approach.
Thesis
The world of exchange traded funds has become a very diversified one, with retail investors now having a plethora of options in terms of choosing the exact risk factors desired for their particular investment profile. The iShares Interest Rate Hedged Corporate Bond ETF ( LQDH ) is a fixed income exchange traded fund that falls in the 'hedging' ETF category. The fund is a take on the very popular iShares iBoxx $ Investment Grade Corporate Bond ETF ( LQD ), which provides investors with exposure to investment grade corporate bonds....
LQDH: A Corporate Spreads Play (Rating Downgrade)