Which Corporate Bond ETF Is the Better Buy: iShares’ LQD or State Street’s SPLB?
One fund yields more and costs less. The other has held up better through every tough stretch. Here is how to choose.
When comparing the iShares iBoxx $Investment Grade Corporate Bond ETF (LQD) to the State Street SPDR Portfolio Long Term Corporate Bond ETF (SPLB), investors must consider several key factors. LQD boasts higher liquidity and a proven track record of capital preservation, while SPLB offers a more cost-effective way to achieve potentially higher income yields.
Both ETFs provide exposure to investment-grade corporate debt, but they fulfill distinct roles within a fixed-income strategy. The SPDR fund concentrates solely on long-term bonds with maturities of ten years or more, whereas LQD tracks a wider liquid index of high-quality corporate issues.
These differences in maturity and selection criteria play a significant role in their performance during interest rate fluctuations and contribute to their varying risk profiles. Beta, which measures price volatility relative to the S&P 500, is calculated from monthly returns over the fund's history (up to five years). The 1-year return represents the total return over the trailing 12 months. SPLB's dividend yield reflects the trailing-12-month distribution yield.
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