At a glance
LQDW charges 0.34% a year, below the 0.86% average of the 7 funds most like it (the cheapest of 8). It has $318.2M in assets, the 8th largest of that group; it paid 12.38% of its price in distributions over the past 12 months, monthly. Over the past year it returned +1.2% with distributions reinvested, the weakest of those 8 funds; over three years it returned +5.1% a year.
The short version
iShares Investment Grade Corporate Bond BuyWrite Strategy ETF (LQDW) holds a single fund, BlackRock's iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD), and sells one-month call options on it to earn extra income. This covered-call approach gave a trailing 12-month yield of 12.38% as of October 27, 2026, paid monthly. The trade-off is that it gives up gains when bond prices rally but takes the full losses when they fall. It costs 0.34% a year.
Price history
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LQDW +1.2% 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 | |
|---|---|---|---|---|---|---|
| LQDW official prospectus, to Dec 31, 2025 | — | +8.95% | — | — | — | +2.12% |
| Bloomberg US Universal Index index, same period | — | +7.58% | — | — | — | +3.42% |
| Cboe LQD Buy Write Index index, same period | — | +8.83% | — | — | — | +2.38% |
| LQDW price data to Oct 27, 2026 | +1.1% | +1.2% | +5.1% | — | — | +2.2% |
- Over the year to Oct 27, 2026, LQDW returned +1.2%, 8th of 8 among similar funds.
- Its worst full calendar year was 2024 (+2.6%); its best was 2025 (+9.1%).
- The deepest fall in its price history was 9.2% (Aug 25, 2022 to Oct 20, 2022), recovered by Aug 16, 2024.
Show as a table
| Year | Price data | Prospectus (official) |
|---|---|---|
| 2026 (to date) | +1.1% | — |
| 2025 | +9.1% | +8.95% |
| 2024 | +2.6% | +2.84% |
| 2023 | +4.1% | +3.93% |
| 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 | Before this security existed |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Before this security existed |
Dividends and income
Show as a table
| Year | Per share | Change |
|---|---|---|
| 2026 (to date) | $1.9500 | |
| 2025 | $3.9400 | -4.6% |
| 2024 | $4.1300 | -28.0% |
| 2023 | $5.7400 |
What's inside
As of Jul 31, 2026, the fund held 1 securities; the ten largest made up 99.92% of assets.
| Fund held | Weight | |
|---|---|---|
| iShares iBoxx USD Investment Grade Corporate Bond ETF | 99.92% |
By country
United States 99.92%By asset type
Stocks 99.92%What changed recently
- Over the three months to Jul 31, 2026, investors added a net $55.7M (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: +0.71%, +0.73%, -1.58%.
How it works
LQDW tracks the Cboe LQD BuyWrite Index, built by Cboe Global Indices. The fund owns just one fund: the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD), which made up 99.92% of assets as of July 31, 2026. LQD follows the Markit iBoxx USD Liquid Investment Grade Index. That index holds US dollar investment-grade corporate bonds from companies based in developed markets. Each issuer needs at least $2 billion of bonds outstanding, and each bond needs at least $750 million outstanding and three or more years to maturity. Bonds are weighted by market value, with no issuer above 3%.
Each month, the fund writes (sells) one-month call options on LQD. A call gives the buyer the right to purchase shares at a set "strike" price, and the seller collects a cash premium up front. The strike is set close to LQD's closing price the day before the roll date. The options are European-style, which means they can only be exercised at expiration. Instead of handing over shares, the fund usually buys the options back on the roll date and then sells new ones.
The calls cover up to the full LQD position. So the fund misses LQD's gains above the strike but takes its full losses. BlackRock Fund Advisors may use slightly different dates or strikes than the index, and it may skip a month when premiums would be tiny. Portfolio turnover was 1%.
What it really costs
- LQDW charges 0.34% 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.
- Using the prospectus's standard example, $10,000 invested would cost about $35 in the first year and $431 over 10 years (assuming a 5% annual return).
| Cost of $10,000 (SEC example) | 1 yr | 3 yrs | 5 yrs | 10 yrs |
|---|---|---|---|---|
| LQDW | $35 | $109 | $191 | $431 |
Structure and tax notes
- Generates much of its income from selling options (directly or through notes). That income is usually taxed as ordinary income rather than as qualified dividends, and the strategy gives up some upside in strong markets.
- 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
The fund pays monthly distributions boosted by option premiums on top of investment-grade bond interest, and gives up price gains in exchange.
LQDW could add monthly cash flow backed by investment-grade corporate bonds. Its trailing yield was 12.38% as of October 27, 2026, but much of that comes from option premiums. That income is usually taxed as ordinary income, and distributions can exceed what the fund earns. The fund launched in August 2022, so it has no record from 2008, the 2020 crash or most of the 2022 bear market. Its deepest drop, 9.2% from August 25 to October 20, 2022, took about 22 months to recover, ending August 16, 2024. Anyone who sold shares during that stretch would have locked in a loss. Its weakest full calendar year was 2024, up 2.84%. It costs 0.34% a year, or $35 in the first year on $10,000 in the SEC example. 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 and can accept capped gains; the trailing yield was 12.38% as of October 27, 2026.
- Investors who expect bond prices to stay flat or move slowly, when monthly call premiums can add to LQD's interest income.
- Holders using tax-advantaged accounts such as IRAs, where option income being taxed as ordinary income matters less.
Look elsewhere if
- Investors hoping to profit when interest rates fall, because the calls give up LQD's gains above each month's strike price.
- Those wanting a long track record: the fund launched August 2022, so it has no history from 2008, 2020 or most of 2022.
- Anyone treating the 12.38% yield as total return; the fund's 1-year return was 1.2% as of October 27, 2026.
Close alternatives
Matched by other buffer (defined-outcome) funds, largest first.
| Fund | Cost | Net assets | 1 yr | 3 yr |
|---|---|---|---|---|
| LQDW this fund | 0.34% | $318.2M | +1.2% | +5.1% |
| 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 LQDW pay monthly dividends?
Yes. LQDW pays distributions monthly. In the 12 months to October 27, 2026, it paid $2.83 per share, a trailing yield of 12.38%. Much of that comes from premiums earned by selling call options on LQD, not just bond interest. Option income is usually taxed as ordinary income rather than as qualified dividends. The prospectus also warns that distributions may exceed the fund's income and gains, so part of a payout may be a return of the investor's own capital.
What's the difference between LQDW and LQD?
LQDW owns LQD and sells one-month call options on it. LQD, the iShares iBoxx $ Investment Grade Corporate Bond ETF, holds corporate bonds directly and keeps all of its price gains. LQDW collects option premiums every month, which raises its payout. In exchange, it gives up LQD's gains above each option's strike price but still takes the full losses. As of July 31, 2026, 99.92% of LQDW's assets were in LQD. From inception through December 31, 2025, LQDW returned 2.12% a year.
Why is LQDW's yield so high?
It adds option premiums on top of bond interest. Selling calls each month with strikes near LQD's price brings in extra cash, which pushed the trailing yield to 12.38% as of October 27, 2026. But yield is not the same as total return. The fund's 1-year return was 1.2% as of that date, far below its yield. When a fund pays out more than it earns, its share price tends to fall, and capped upside makes the lost value harder to win back.
How does LQDW do when interest rates rise?
It loses value. Rising rates push bond prices down, and the option premiums soften only part of the drop. LQDW's deepest decline was 9.2%, from August 25 to October 20, 2022, and it took about 22 months to recover. Its weakest quarter was a 2.95% loss in the third quarter of 2023. When rates fall and bonds rally, the calls limit how much the fund can gain, so it doesn't fully catch up the way LQD can.
How much does LQDW cost?
LQDW's expense ratio is 0.34% a year, according to its prospectus filed February 23, 2026. That includes a 0.20% management fee. In the SEC's standard example of $10,000 invested with a 5% yearly return, costs come to about $35 after one year, $109 after three, $191 after five and $431 after ten. Equity buffer ETFs such as BUFR charge 0.95%, but they follow a different strategy, so the two costs aren't directly comparable.