Is the LQD suggesting trouble ahead for the broader marketThe investment-grade corporate bond ETF LQD leads the broader market. Off late it has broken down completely exhibiting a
death cross. This spells trouble for the broader market.
Key stats
About iShares iBoxx $ Investment Grade Corporate Bond ETF
Issuer
BlackRock, Inc.
Brand
iShares
Expense ratio
0.14%
Home page
Inception date
Jul 22, 2002
Index tracked
iBoxx USD Liquid Investment Grade Index
Management style
Passive
ISIN
US4642872422
LQD, given it was first to market in this space, is easily one of the most popular corporate bond ETFs. The ETF is notable for a broad portfolio of bonds from the Markit iBoxx USD Liquid Investment Grade Index, whose underlying liquidity may contribute tight tracking and subdued premiums / discounts. LQD differs from our benchmark in key ways. LQD only selects bonds that have at least three years to maturity, which gives it a longer weighted average maturity and increased interest rate risk. The fund is cheap to hold. In all, LQD offers liquid exposure to a somewhat-aggressive, yield-seeking basket of corporate bonds.
Classification
Asset Class
Fixed income
Category
Corporate, broad-based
Focus
Investment grade
Niche
Broad maturities
Strategy
Vanilla
Weighting scheme
Market value
Selection criteria
Market value
What's in the fund
Exposure type
Corporate
Stocks0.07%
Finance0.03%
Energy Minerals0.03%
Bonds, Cash & Other99.93%
Corporate99.42%
Cash0.48%
Miscellaneous0.03%
