At a glance
LQDI charges 0.18% a year, below the 0.86% average of the 7 funds most like it (the cheapest of 8). It has $69.6M in assets, the 8th largest of that group; it paid 4.87% of its price in distributions over the past 12 months, monthly. Over the past year it returned −2.4% with distributions reinvested, the weakest of those 8 funds; over three years it returned +6.2% a year. At its worst it fell 29.0% in the 2020 crash (S&P 500: 33.7%) and 19.0% in the 2022 bear market (S&P 500: 24.5%), and was back at its earlier high 4 months and 34 months after the lows.
The short version
The iShares Inflation Hedged Corporate Bond ETF (LQDI) is a fund of funds. It holds the iShares iBoxx USD Investment Grade Corporate Bond ETF and adds inflation swaps, which are contracts that pay off when inflation runs at or above what markets expected. The aim is corporate bond income with less damage from surprise inflation. It charges 0.18% a year after a fee waiver, and it is small: $69.6 million in net assets as of July 31, 2026.
Price history
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LQDI -2.4% 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 | |
|---|---|---|---|---|---|---|
| LQDI official prospectus, to Dec 31, 2025 | — | +7.99% | — | +1.75% | — | +4.33% |
| Bloomberg US Universal Index index, same period | — | +7.58% | — | +0.06% | — | +2.46% |
| LQDI price data to Oct 27, 2026 | -1.1% | -2.4% | +6.2% | +0.1% | — | +3.8% |
- Over the year to Oct 27, 2026, LQDI returned -2.4%, 8th of 8 among similar funds.
- Its 5-year annualized return was +0.1%.
- In the 2020 COVID crash it fell 29% and regained its old high 3.6 months after the low.
- Its worst full calendar year was 2022 (-15.4%); its best was 2019 (+15.8%).
- The deepest fall in its price history was 29% (Mar 6, 2020 to Mar 20, 2020), recovered by Jul 7, 2020.
Show as a table
| Year | Price data | Prospectus (official) |
|---|---|---|
| 2026 (to date) | -1.1% | — |
| 2025 | +8.9% | +7.99% |
| 2024 | +1.5% | +1.95% |
| 2023 | +8.9% | +8.89% |
| 2022 | -15.4% | -14.93% |
| 2021 | +7.7% | +6.92% |
| 2020 | +11.9% | +11.26% |
| 2019 | +15.8% | +16.73% |
| 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 21.2% over that stretch · deepest drop along the way 29%, back to its old high 3.6 months after the low |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Lost 18.7% over that stretch · deepest drop along the way 19%, back to its old high 33.7 months after the low |
Dividends and income
Show as a table
| Year | Per share | Change |
|---|---|---|
| 2026 (to date) | $0.9300 | |
| 2025 | $1.1900 | 0.0% |
| 2024 | $1.1900 | +13.3% |
| 2023 | $1.0500 | +29.6% |
| 2022 | $0.8100 | +3.5% |
| 2021 | $0.7824 | +11.8% |
| 2020 | $0.7000 | -18.6% |
| 2019 | $0.8600 |
What's inside
As of Jul 31, 2026, the fund held 1 securities; the ten largest made up 94.08% of assets, and 47.18% sat in cash and money-market holdings.
| Fund held | Weight | |
|---|---|---|
| iShares iBoxx USD Investment Grade Corporate Bond ETF | 94.08% |
By country
United States 94.08%By asset type
Stocks 94.08%What changed recently
- Over the three months to Jul 31, 2026, investors added a net $1.3M (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: +0.92%, -0.79%, -1.53%.
How it works
LQDI tracks the BlackRock Inflation Hedged Corporate Bond Index, which is built by BlackRock Index Services, LLC. The index has two parts. The first is a fixed number of shares of the iShares iBoxx USD Investment Grade Corporate Bond ETF. That fund owns US dollar bonds from companies rated investment grade, the higher-quality end of the credit scale. As of July 31, 2026, it made up about 94% of LQDI's net assets. The second part is a set of up to 10 inflation swaps with different maturities, plus cash meant to reflect the collateral the swaps require.
In an inflation swap, the fund pays a fixed rate and receives a floating rate tied to the Consumer Price Index (CPI). If actual inflation matches or beats what was expected, the fund gains. If inflation comes in lower, the fund loses money on the swap and trails the underlying fund. The index provider rebalances the swap weights daily. Each month it adds new swaps and drops the previous month's. As of July 31, 2026, the fund held 122 derivative positions, with LCH Ltd. as counterparty.
The hedge covers inflation only. It does not protect against credit risk or other interest rate moves, and it does not hedge the fund's own distributions. Because it uses derivatives, the fund counts as a commodity pool, so its adviser (BFA) is regulated by the CFTC.
What it really costs
- LQDI charges 0.18% a year, versus an average of 0.86% for the similar funds below (1st of 8, cheapest first).
- Of that, 0.2% is the management fee; the rest covers other fund expenses.
- The fee includes a 0.15% waiver from the adviser, which may end.
- Using the prospectus's standard example, $10,000 invested would cost about $18 in the first year and $388 over 10 years (assuming a 5% annual return).
| Cost of $10,000 (SEC example) | 1 yr | 3 yrs | 5 yrs | 10 yrs |
|---|---|---|---|---|
| LQDI | $18 | $75 | $154 | $388 |
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
LQDI pays monthly income from investment-grade corporate bonds, and its inflation swaps aim to protect that bond exposure from surprise inflation.
LQDI could add monthly income to a portfolio. Its trailing 12-month yield was 4.87% as of October 27, 2026. Costs are low: the SEC's standard example puts them at $18 in the first year on $10,000. The inflation hedge did not make it a safe place to park money. The fund launched in May 2018, so it has no 2008 record. It fell 29% between March 6 and March 20, 2020, then recovered by July 7, 2020. In the 2022 bear market it dropped 19% and took about 34 months to recover, until July 21, 2025. Its worst calendar year was 2022, at -14.93%. A retiree raising cash in a year like 2022 would have drawn from a fund well below its peak. Past results don't predict future ones, and a plan should look at the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- Investors who want monthly income from investment-grade corporate bonds plus a hedge against inflation running above market expectations.
- Holders of the iShares iBoxx USD Investment Grade Corporate Bond ETF who want CPI swap protection added on, for a 0.18% net expense ratio.
- People comfortable owning a fund of funds that uses inflation swaps and is regulated as a commodity pool.
Look elsewhere if
- Anyone wanting protection from rising interest rates or credit losses. The hedge covers neither, and the fund lost 14.93% in 2022.
- Investors who prefer larger funds. LQDI held about $69.6 million in net assets as of July 31, 2026.
- Those who expect inflation to come in below forecasts. In that case the swaps lose money and LQDI trails its underlying bond ETF.
Close alternatives
Matched by other buffer (defined-outcome) funds, largest first.
| Fund | Cost | Net assets | 1 yr | 3 yr |
|---|---|---|---|---|
| LQDI this fund | 0.18% | $69.6M | -2.4% | +6.2% |
| 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
What does LQDI invest in?
LQDI mostly holds another iShares fund, the iShares iBoxx USD Investment Grade Corporate Bond ETF, which made up about 94% of net assets as of July 31, 2026. On top of that it holds CPI-linked inflation swaps. It had 122 derivative positions on that date, including swaps maturing in 2026 and 2031. Together they track the BlackRock Inflation Hedged Corporate Bond Index, which aims to reduce the inflation risk of a portfolio of investment-grade corporate bonds.
What's the difference between LQDI and the iShares iBoxx USD Investment Grade Corporate Bond ETF?
LQDI is that fund plus an inflation hedge. Both give you exposure to the same investment-grade corporate bonds. LQDI adds up to 10 inflation swaps, which gain when CPI inflation matches or beats expectations and lose when it falls short. So LQDI should do better than the plain bond fund when inflation surprises on the high side, and worse when inflation comes in lower than expected. Credit risk and other interest rate risk are the same for both.
Does LQDI pay monthly dividends?
Yes. LQDI pays distributions monthly. Over the 12 months to October 27, 2026, it paid $1.23 per share, a trailing yield of 4.87%. That income comes mainly from the corporate bonds held through its underlying fund. One caveat from the prospectus: the inflation swaps protect the value of the bond portfolio, not the distributions themselves. Rising prices can still erode what the payouts buy over time.
Did LQDI protect against inflation in 2022?
Not against losses. LQDI returned -14.93% in 2022, its worst calendar year, because its hedge targets inflation only, not rising rates or credit risk. Over the five years to December 31, 2025, it averaged 1.75% a year, compared with 0.06% for the Bloomberg US Universal Index. Its one-year return to that date was 7.99%, versus 7.58% for the index. Since its 2018 launch it has averaged 4.33% a year.
What is LQDI's expense ratio?
LQDI's net expense ratio is 0.18% a year after a fee waiver, according to the prospectus filed February 23, 2026. In the SEC's standard example ($10,000 invested, 5% annual return), total costs would be about $18 after one year, $75 after three, $154 after five and $388 after ten. Portfolio turnover was 4%, which keeps trading costs inside the fund low. The fund was small, at $69.6 million in net assets as of July 31, 2026.