At a glance
LQDH charges 0.24% a year, below the 0.86% average of the 7 funds most like it (the cheapest of 8). It has $537.1M in assets, the 8th largest of that group; it paid 5.81% of its price in distributions over the past 12 months, monthly. Over the past year it returned +4.4% with distributions reinvested, the weakest of those 8 funds; over three years it returned +7.3% a year. At its worst it fell 24.0% in the 2020 crash (S&P 500: 33.7%) and 6.5% in the 2022 bear market (S&P 500: 24.5%), and was back at its earlier high 8 months and 4 months after the lows.
The short version
iShares Interest Rate Hedged Corporate Bond ETF (LQDH) is a fund of funds. As of July 31, 2026, about 93% of its assets were in the iShares iBoxx USD Investment Grade Corporate Bond ETF. It pairs that fund with interest rate swaps that cancel most of its sensitivity to rate changes. What's left is mainly exposure to corporate credit rather than to interest rates, with monthly income and a 0.24% expense ratio after a fee waiver.
Price history
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LQDH +4.4% 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 | |
|---|---|---|---|---|---|---|
| LQDH official prospectus, to Dec 31, 2025 | — | +6.98% | — | +5.04% | +4.51% | — |
| Bloomberg US Universal Index index, same period | — | +7.58% | — | +0.06% | +2.44% | — |
| LQDH price data to Oct 27, 2026 | +3.5% | +4.4% | +7.3% | +5.2% | +4.6% | +3.5% |
- Over the year to Oct 27, 2026, LQDH returned +4.4%, 8th of 8 among similar funds.
- Its 5-year annualized return was +5.2% and its 10-year +4.6%.
- In the 2020 COVID crash it fell 24% and regained its old high 7.7 months after the low.
- Its worst full calendar year was 2015 (-2.3%); its best was 2023 (+11.2%).
- The deepest fall in its price history was 24.6% (Dec 31, 2019 to Mar 20, 2020), recovered by Nov 19, 2020.
Show as a table
| Year | Price data | Prospectus (official) |
|---|---|---|
| 2026 (to date) | +3.5% | — |
| 2025 | +7.0% | +6.98% |
| 2024 | +7.4% | +7.41% |
| 2023 | +11.2% | +10.66% |
| 2022 | -1.9% | -1.33% |
| 2021 | +1.9% | +1.94% |
| 2020 | +1.7% | +1.48% |
| 2019 | +9.5% | +9.17% |
| 2018 | -2.2% | -1.79% |
| 2017 | +6.0% | +6.16% |
| 2016 | +5.1% | +5.21% |
| 2015 | -2.3% | — |
| 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 19.8% over that stretch · deepest drop along the way 24%, back to its old high 7.7 months after the low |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Lost 6.5% over that stretch · deepest drop along the way 6.5%, back to its old high 3.5 months after the low |
Dividends and income
Show as a table
| Year | Per share | Change |
|---|---|---|
| 2026 (to date) | $4.0300 | |
| 2025 | $5.6700 | -19.3% |
| 2024 | $7.0300 | -1.8% |
| 2023 | $7.1600 | +111.8% |
| 2022 | $3.3800 | +108.3% |
| 2021 | $1.6224 | -23.8% |
| 2020 | $2.1300 | -28.8% |
| 2019 | $2.9900 | -35.1% |
| 2018 | $4.6100 | +100.4% |
| 2017 | $2.3000 | +4.5% |
| 2016 | $2.2000 | -18.8% |
| 2015 | $2.7100 |
What's inside
As of Jul 31, 2026, the fund held 1 securities; the ten largest made up 93.26% of assets, and 46.54% sat in cash and money-market holdings.
| Fund held | Weight | |
|---|---|---|
| iShares iBoxx USD Investment Grade Corporate Bond ETF | 93.26% |
By country
United States 93.26%By asset type
Stocks 93.26%What changed recently
- Over the three months to Jul 31, 2026, investors added a net $32.3M (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: +1.37%, -0.06%, -0.11%.
How it works
LQDH tracks the BlackRock Interest Rate Hedged Corporate Bond Index. The index is built by BlackRock Index Services, which is part of the same company as the fund's adviser. The index holds a fixed number of shares of one fund, the iShares iBoxx USD Investment Grade Corporate Bond ETF, plus up to 10 interest rate swaps with different maturities. Investment-grade bonds are issued by companies rated as fairly likely to repay. Bonds in the underlying fund need at least three years left to maturity.
An interest rate swap is a contract to trade payments. Here the fund pays a fixed rate and receives a floating one. When rates rise, the swaps gain value, which offsets falling bond prices. When rates fall, the swaps lose value. Together they target the portfolio's duration, meaning its price sensitivity to rate changes, at key points along the yield curve. The index provider resets swap weights daily and replaces the contracts each month. The swaps are cleared through the Chicago Mercantile Exchange, and the fund holds cash as collateral. It may also use Treasury and other rate futures.
The hedge does not cover credit risk, which is the risk that corporate bonds fall on fears of default. Because it uses swaps and futures, the fund is regulated as a commodity pool. BlackRock holds a representative sample of the index, and the fund's portfolio turnover was 2%.
What it really costs
- LQDH charges 0.24% a year, versus an average of 0.86% for the similar funds below (1st of 8, cheapest first).
- Of that, 0.3% is the management fee; the rest covers other fund expenses.
- The fee includes a 0.2% waiver from the adviser, which may end.
- Using the prospectus's standard example, $10,000 invested would cost about $25 in the first year and $535 over 10 years (assuming a 5% annual return).
| Cost of $10,000 (SEC example) | 1 yr | 3 yrs | 5 yrs | 10 yrs |
|---|---|---|---|---|
| LQDH | $25 | $121 | $226 | $535 |
Structure and tax notes
- Invests in other funds rather than directly in stocks or bonds, so its holdings are those funds.
- 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 income from investment-grade corporate bonds while hedging away most interest rate risk, but it still carries the full credit risk of those bonds.
LQDH launched in May 2014, so it has no record from the 2008 crisis. Its history shows that the hedge helps in some markets and not in others. In the 2022 bear market, when rates jumped, it fell 6.5% and recovered in about 3.5 months. Its official return for 2022 was -1.33%. The 2020 COVID crash was driven by fear about corporate credit, and the hedge did not help: the fund fell about 24.6% from December 31, 2019, to March 20, 2020, and took about eight months to recover. Its worst calendar year was 2015, at -2.3%. Someone forced to sell during a credit panic could lock in steep losses. It pays monthly. Its trailing 12-month yield was 5.81% as of October 27, 2026, and it costs 0.24% a year. Past results don't predict the future, and a 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 investment-grade corporate bonds. The trailing yield was 5.81% as of October 27, 2026, with little rate sensitivity.
- Investors worried about rising rates. Its official 2022 return was -1.33%, and its three-year volatility was 3.2% as of October 27, 2026.
- Cost-conscious holders wanting a hedged credit fund at 0.24% a year. That's $25 in the first year on $10,000 under the SEC example.
Look elsewhere if
- Investors who want bonds that hold up when stocks crash. It fell about 24.6% in early 2020 because the hedge doesn't cover credit fears.
- Those expecting falling rates to lift bond prices. The swaps lose value when rates drop, which gives back most of those gains.
- Anyone wanting a simple structure. It holds one ETF plus about 190 swap positions and is regulated as a commodity pool.
Close alternatives
Matched by other buffer (defined-outcome) funds, largest first.
| Fund | Cost | Net assets | 1 yr | 3 yr |
|---|---|---|---|---|
| LQDH this fund | 0.24% | $537.1M | +4.4% | +7.3% |
| BUFR FT Vest Laddered Buffer ETF | 0.95% | $10.49B | +11.6% | +16.8% |
| BUFD FT Vest Laddered Deep Buffer ETF | 0.95% | $2.04B | +9.5% | +13.9% |
| PJAN Innovator U.S. Equity Power Buffer ETF - Ja… | 0.79% | $1.44B | +10.5% | +14.8% |
| PDEC Innovator U.S. Equity Power Buffer ETF - De… | 0.79% | $984.1M | +11.6% | +14.9% |
| FDEC FT Vest US Equity Buffer ETF - December | 0.85% | $1.31B | +12.9% | +18.5% |
| FJAN FT Vest US Equity Buffer ETF - January | 0.85% | $1.47B | +12.3% | +17.4% |
| FFEB FT Vest U.S. Equity Buffer Fund - February | 0.85% | $1.42B | +12.9% | +18.6% |
Questions investors ask
Does LQDH pay monthly dividends?
Yes. LQDH pays distributions monthly. Over the 12 months through October 27, 2026, it paid about $5.37 per share, a trailing yield of 5.81%. The income comes mainly from the corporate bonds held by its underlying fund, the iShares iBoxx USD Investment Grade Corporate Bond ETF. Payouts can change from month to month, partly because the fund's swaps trade fixed payments for floating-rate payments that move with short-term rates.
What's the difference between LQDH and the iShares iBoxx USD Investment Grade Corporate Bond ETF?
LQDH owns that fund and adds a hedge. As of July 31, 2026, about 93% of LQDH's assets were in the iShares iBoxx USD Investment Grade Corporate Bond ETF. It also held about 190 interest rate swap positions designed to cancel most of that fund's rate sensitivity. Both carry the same corporate credit risk. LQDH tends to hold up better when rates rise and lag when rates fall.
Is LQDH a good bond fund when interest rates rise?
Its rate hedge is built for that situation, and its record reflects it. In 2022, a year of sharp rate increases, LQDH returned -1.33%. Over the five years ending December 31, 2025, it averaged 5.04% a year. The broad Bloomberg US Universal Index averaged 0.06% over the same period. The hedge does not protect against credit risk, which caused its biggest loss in 2020.
Why did LQDH fall so much in 2020?
LQDH fell because investors feared corporate defaults, and its hedge covers interest rates, not credit. Its worst quarter was the first quarter of 2020, at -12.96%. From December 31, 2019, to March 20, 2020, it fell about 24.6%. Falling rates also hurt its swaps. It recovered by November 19, 2020, and the second quarter of 2020 was its strongest quarter, at 8.68%.
What is LQDH's expense ratio?
LQDH's expense ratio is 0.24%, according to its prospectus filed February 23, 2026. That figure is after a fee waiver: the management fee is 0.30%, reduced by a 0.20% waiver. Under the SEC's standard example, a $10,000 investment earning 5% a year would cost about $25 after one year. Costs would total $121 after three years, $226 after five and $535 after ten.