Which Corporate Bond ETF Is the Better Buy: iShares’ LQD or State Street’s SPLB?
Key PointsiShares iBoxx $ Investment Grade Corporate Bond ETF provides significantly higher liquidity and a much larger assets under management (AUM) base than its State Street competitor.
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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