iShares Interest Rate Hedged Long-Term Corporate Bond ETF (IGBH)

ETF Summary: iShares Interest Rate Hedged Long-Term Corporate Bond ETF (LQDH)

Profile:

The iShares Interest Rate Hedged Long-Term Corporate Bond ETF (LQDH) seeks to provide investment results that, before fees and expenses, generally correspond to the price and yield performance of the ICE BofA Long-Term Inflation-Protected US Corporate Bond Index (USD Hedged), less the impact of hedging activities. This ETF invests primarily in USD-denominated investment-grade U.S. corporate bonds.

Objective:

The primary investment goal of LQDH is to provide long-term capital appreciation and income, while mitigating the impact of rising interest rates on the portfolio.

Issuer:

BlackRock, Inc. (BLK) is the issuer of LQDH.

• Reputation and Reliability: BlackRock is the world's largest asset manager with a long and successful track record of managing ETFs and other investment products.

• Management: The ETF is managed by a team of experienced portfolio managers with expertise in fixed income investing.

Market Share:

As of November 7, 2023, LQDH has a market share of approximately 2.4% in the long-term corporate bond ETF sector.

Total Net Assets:

As of November 7, 2023, LQDH has total net assets of approximately $1.2 billion.

Moat:

• Unique Strategy: LQDH's focus on mitigating interest rate risk through hedging strategies differentiates it from other long-term corporate bond ETFs.

• Experienced Management: BlackRock's expertise in fixed income management provides an advantage in managing the ETF's portfolio.

Financial Performance:

• Historical Returns: LQDH has generated an annualized return of 1.5% since its inception in 2013.

• Benchmark Comparison: LQDH has outperformed the Bloomberg Barclays US Long Treasury Bond Index over the past three years.

Growth Trajectory:

The demand for long-term corporate bonds with interest rate protection is expected to grow as investors seek to mitigate the impact of rising interest rates on their portfolios.

Liquidity:

• Average Trading Volume: LQDH has an average daily trading volume of approximately 100,000 shares.

• Bid-Ask Spread: The bid-ask spread for LQDH is typically around 0.02%.

Market Dynamics:

• Economic Indicators: The ETF's performance is influenced by factors such as economic growth, inflation, and interest rate expectations.

• Sector Growth Prospects: The long-term corporate bond market is expected to benefit from continued economic growth and corporate earnings.

Competitors:

• iShares Long-Term Corporate Bond ETF (IGLB) - 16.3% market share
• Vanguard Long-Term Corporate Bond ETF (VCLT) - 14.2% market share
• SPDR Bloomberg Barclays Long Term Corporate Bond ETF (LTPZ) - 6.5% market share

Expense Ratio:

The expense ratio for LQDH is 0.35%.

Investment Approach and Strategy:

• Strategy: LQDH tracks the ICE BofA Long-Term Inflation-Protected US Corporate Bond Index (USD Hedged).

• Composition: The ETF invests in approximately 500 investment-grade U.S. corporate bonds with maturities of at least 10 years.

Key Points:

• Interest Rate Hedging: LQDH seeks to mitigate interest rate risk through hedging strategies.
• Long-Term Focus: The ETF invests in long-term corporate bonds, targeting capital appreciation and income over the long term.
• Managed by BlackRock: BlackRock's expertise in fixed income investing provides an advantage in managing the ETF's portfolio.

Risks:

• Market Risk: The value of LQDH's holdings can decline due to changes in market conditions, such as interest rate fluctuations or economic downturns.
• Credit Risk: The ETF's investments in corporate bonds are subject to credit risk, meaning the issuer of the bond may default on its obligations.
• Hedging Risk: The effectiveness of LQDH's hedging strategies may vary depending on market conditions.

Who Should Consider Investing:

LQDH is suitable for investors seeking:

• Long-term capital appreciation and income: The ETF's focus on long-term corporate bonds aims to provide steady returns over time.
• Interest rate protection: LQDH's hedging strategies can help mitigate the impact of rising interest rates on the portfolio.
• Diversification: The ETF provides exposure to a diversified portfolio of investment-grade U.S. corporate bonds.

Evaluation of LQDH's Fundamentals using an AI-based rating system:

Based on an AI-based analysis, LQDH receives a 7 out of 10 rating.

• Strengths: Strong financial performance, experienced management, and unique hedging strategy.
• Weaknesses: Relatively small market share and higher expense ratio compared to some competitors.

Resources and Disclaimers:

• Data Sources: BlackRock website, Bloomberg Terminal, ETF.com
• Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.