At a glance
LKOR charges 0.15% a year, above the 0.08% average of the 7 funds most like it (the 7th cheapest of 8). It has $30.0M in assets, the 8th largest of that group; it paid 6.04% of its price in distributions over the past 12 months, monthly. Over the past year it returned −5.7% with distributions reinvested, the weakest of those 8 funds; over three years it returned +6.7% a year. At its worst it fell 26.8% in the 2020 crash (S&P 500: 33.7%) and 29.5% in the 2022 bear market (S&P 500: 24.5%). Its ten largest positions make up 6.9% of the fund, out of 843 in all.
The short version
FlexShares Credit-Scored US Long Corporate Bond Index Fund (LKOR) tracks a Northern Trust index of investment-grade corporate bonds (rated BBB- or higher) maturing in 10 or more years, favoring bonds that score well on value and quality. It pays monthly; its trailing 12-month yield was 6.04% as of October 27, 2026. The drawbacks are a 0.15% expense ratio, versus 0.03%–0.04% at VCLT and SPLB, and big price swings, such as 2022's 26.34% loss.
Price history
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LKOR -5.7% over the year to Oct 27, 2026, total return with distributions reinvested.
How it has behaved
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | Since start | |
|---|---|---|---|---|---|---|
| LKOR official prospectus, to Dec 31, 2025 | — | +7.27% | — | -2.75% | +3.60% | — |
| Bloomberg US Aggregate Bond Index index, same period | — | +7.30% | — | -0.36% | +2.01% | — |
| LKOR price data to Oct 27, 2026 | -2.9% | -5.7% | +6.7% | -3.2% | +1.7% | +2.8% |
- Over the year to Oct 27, 2026, LKOR returned -5.7%, 8th of 8 among similar funds.
- Its 5-year annualized return was -3.2% and its 10-year +1.7%.
- In the 2020 COVID crash it fell 26.8% and regained its old high 3.4 months after the low.
- Its worst full calendar year was 2022 (-25.6%); its best was 2019 (+24.4%).
- The deepest fall in its price history was 34.8% (Sep 22, 2021 to Oct 24, 2022), not yet recovered.
Show as a table
| Year | Price data | Prospectus (official) |
|---|---|---|
| 2026 (to date) | -2.9% | — |
| 2025 | +7.0% | +7.27% |
| 2024 | -1.0% | -1.00% |
| 2023 | +11.7% | +12.39% |
| 2022 | -25.6% | -26.34% |
| 2021 | -1.6% | -1.07% |
| 2020 | +15.6% | +16.27% |
| 2019 | +24.4% | +24.23% |
| 2018 | -7.6% | -7.92% |
| 2017 | +13.9% | +12.03% |
| 2016 | +6.6% | +9.95% |
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Before this security existed |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Lost 23.6% over that stretch · deepest drop along the way 26.8%, back to its old high 3.4 months after the low |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Lost 29.5% over that stretch · deepest drop along the way 29.5%, not recovered by the end of the data |
Dividends and income
Show as a table
| Year | Per share | Change |
|---|---|---|
| 2026 (to date) | $1.8100 | |
| 2025 | $2.3500 | +1.3% |
| 2024 | $2.3200 | +5.9% |
| 2023 | $2.1900 | +10.1% |
| 2022 | $1.9900 | -28.4% |
| 2021 | $2.7800 | -32.7% |
| 2020 | $4.1300 | +93.9% |
| 2019 | $2.1300 | +3.4% |
| 2018 | $2.0600 | -0.5% |
| 2017 | $2.0700 | -25.3% |
| 2016 | $2.7700 |
What's inside
As of Jul 31, 2026, the fund held 843 securities; the ten largest made up 6.92% of assets.
| Holding | Weight | |
|---|---|---|
| Consolidated Edison Co. of New York, Inc. Bonds and notes | 0.92% | |
| Altria Group, Inc. Bonds and notes | 0.79% | |
| Alphabet, Inc. Bonds and notes | 0.76% | |
| BAT Capital Corp. Bonds and notes | 0.73% | |
| HSBC Holdings plc Bonds and notes | 0.68% | |
| Visa, Inc. Bonds and notes | 0.67% | |
| Duke Energy Corp. Bonds and notes | 0.65% | |
| AT&T, Inc. Bonds and notes | 0.63% | |
| Comcast Corp. Bonds and notes | 0.54% | |
| Amgen, Inc. Bonds and notes | 0.54% | |
| Microsoft Corp. Bonds and notes | 0.52% | |
| Enterprise Products Operating LLC Bonds and notes | 0.52% | |
| Wells Fargo & Co. Bonds and notes | 0.51% | |
| McDonald's Corp. Bonds and notes | 0.50% | |
| Reynolds American, Inc. Bonds and notes | 0.49% |
By country
United States 88.94%United Kingdom 2.56%Canada 1.85%France 0.55%Japan 0.52%By issuer
Companies 96.96%The bonds mature in 23.2 years on average (weighted by size), with an average coupon of 4.96%.
Source: N-PORT holdings report as of Jul 31, 2026. Cash, money-market funds and derivatives are shown separately from the securities list.What changed recently
- Over the three months to Jul 31, 2026, investors withdrew a net $4.2M (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: +1.63%, +0.08%, -3.89%.
How it works
LKOR tracks the Northern Trust US Long Corporate Bond Quality Value Index; Northern Trust designs the index and manages the fund. To be eligible, a bond must be issued in US dollars in the US, be rated at least BBB- or Baa3 (the lowest investment-grade tier), mature in 10 or more years, and have at least $250 million outstanding. The index held 1,515 issues as of December 31, 2025.
A rules-based optimizer picks and weights bonds to favor those with the highest proprietary value and quality scores. The value score compares each bond's price and spread, or extra yield for its risk, with similar bonds and checks the issuer's solvency. The quality score covers management efficiency, profitability and solvency. Limits on bonds, issuers, sectors and turnover apply, and effective duration, a gauge of how far prices move when rates change, stays near that of the eligible universe. The index is rebuilt monthly; the February 2026 prospectus reported 88% portfolio turnover.
The fund does not try to beat the index or turn defensive in falling markets. It uses representative sampling, holding a subset of index bonds with similar traits: 843 holdings as of July 31, 2026. Up to 20% of assets may go to cash, futures, options on futures or non-index bonds; it held no derivatives on that date.
What it really costs
- LKOR charges 0.15% a year, versus an average of 0.08% for the similar funds below (7th of 8, cheapest first).
- The fee includes a 0.01% waiver from the adviser, which may end.
- Using the prospectus's standard example, $10,000 invested would cost about $15 in the first year and $204 over 10 years (assuming a 5% annual return).
| Cost of $10,000 (SEC example) | 1 yr | 3 yrs | 5 yrs | 10 yrs |
|---|---|---|---|---|
| LKOR | $15 | $51 | $89 | $204 |
Structure and tax notes
- Bond prices move opposite to interest rates; the longer the maturities it holds, the more its price reacts to rate changes.
In a retirement portfolio
It pays monthly with a 6.04% trailing yield as of October 27, 2026, but its long-maturity bonds swing too much in price to count as a defensive holding.
LKOR's main appeal is income: it pays monthly, and its trailing 12-month yield was 6.04% as of October 27, 2026. It costs 0.15% a year, about $204 over 10 years on $10,000 in the SEC's standard example. The catch is price risk from long maturities. Launched in September 2015, it has no 2008 record. In the 2020 COVID crash it fell 26.8% in two weeks, then recovered by June 30, 2020. In the 2022 bear market it fell 29.5%, and it lost 26.34% for the calendar year, its worst. Its deepest drop, 34.8% from September 2021 to October 2022, was still not fully recovered as of October 27, 2026. Retirees forced to draw from it in a year like 2022 would have locked in steep losses.
Past results don't predict future returns, and any plan should look at the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- Income seekers who want monthly payouts from long-term corporate bonds; the trailing 12-month yield was 6.04% as of October 27, 2026.
- Investors who want a rules-based value and quality screen applied to long-dated investment-grade corporate bonds, with 843 holdings as of July 31, 2026.
- Long-term holders who can ride out years like 2022, when it lost 26.34%, without needing to tap the money.
Look elsewhere if
- Cost-focused investors: VCLT charges 0.03% and SPLB 0.04%, versus 0.15% here, with similar one- and three-year returns through October 27, 2026.
- Anyone who may need the money within a few years; its 34.8% peak-to-trough drop was still not recovered by October 27, 2026.
- Investors wary of tiny funds: net assets were about $30 million as of July 31, 2026, with $4.2 million leaving in the prior three months.
Close alternatives
Matched by bond funds with the closest average maturity and issuer mix (N-PORT).
| Fund | Avg. maturity | Cost | Net assets | 1 yr | 3 yr |
|---|---|---|---|---|---|
| LKOR this fund | 23.2 yrs | 0.15% | $30.0M | -5.7% | +6.7% |
| SPLB SPDR Portfolio Long Term Corporate Bond ETF | 22.8 yrs | 0.04% | $1.21B | -5.6% | +6.6% |
| VCLT Vanguard Long-Term Corporate Bond ETF | 22.3 yrs | 0.03% | $9.56B | -5.4% | +6.6% |
| LQD iShares iBoxx $ Investment Grade Corporate … | 13 yrs | 0.14% | $32.04B | -2.3% | +5.2% |
| JAAA Janus Henderson AAA CLO ETF | 11.4 yrs | 0.2% | $29.21B | +4.9% | +6.1% |
| VCIT Vanguard Intermediate-Term Corporate Bond E… | 8.2 yrs | 0.03% | $72.04B | -0.6% | +7.1% |
| IGIB iShares 5-10 Year Investment Grade Corporat… | 8.3 yrs | 0.04% | $18.72B | -1.0% | +6.4% |
| USHY iShares Broad USD High Yield Corporate Bond… | 5.4 yrs | 0.08% | $28.59B | +1.2% | +7.7% |
Questions investors ask
Does LKOR pay monthly dividends?
Yes. LKOR pays distributions every month. Over the 12 months through October 27, 2026, it paid $2.38 per share, a trailing yield of 6.04% (the past year's payouts divided by the share price). The money comes from interest on its bonds, which paid an average coupon, or stated interest rate, of 4.96% as of July 31, 2026. The prospectus warns that income may decline when interest rates fall, as maturing bonds are replaced with lower-yielding ones.
What's the difference between LKOR and SPLB?
The biggest gaps are cost and size. LKOR charges 0.15% a year versus 0.04% for the SPDR Portfolio Long Term Corporate Bond ETF (SPLB), and SPLB had about $1.2 billion in net assets as of June 30, 2026, against roughly $30 million for LKOR as of July 31, 2026. LKOR also picks bonds using value and quality scores. Both hold long-term corporate bonds averaging about 23 years to maturity, and results have been close: through October 27, 2026, LKOR returned -5.7% over one year versus -5.6% for SPLB.
Is LKOR good for retirement income?
It can supply monthly income, but its price swings widely. The trailing 12-month yield was 6.04% as of October 27, 2026. Because its bonds averaged 23.2 years to maturity as of July 31, 2026, its price reacts strongly to interest rates. It lost 26.34% in 2022, and its 34.8% decline from September 2021 to October 2022 was still not fully recovered by October 27, 2026. It may suit retirees who can leave principal untouched through bad stretches.
How has LKOR performed over 10 years?
Modestly, and unevenly. Per the prospectus, LKOR returned an average of 3.60% a year over the 10 years ended December 31, 2025, ahead of 2.01% for the Bloomberg US Aggregate Bond Index, a broad bond benchmark. Over five years it averaged -2.75% a year versus -0.36% for that index, dragged down by a 26.34% loss in 2022. Calendar-year results ranged from that loss to a 24.23% gain in 2019.
What bonds does LKOR hold?
LKOR holds long-term corporate bonds, with 843 holdings as of July 31, 2026. The largest positions were bonds from Consolidated Edison Co. of New York (0.92%), Altria Group (0.79%), Alphabet (0.76%), BAT Capital (0.73%), HSBC Holdings (0.68%) and Visa (0.67%). The top 10 made up only 6.92% of assets, so no single bond dominates. About 89% was in US issuers, with smaller slices from the United Kingdom (2.6%) and Canada (1.9%).