LQDW iShares Investment Grade Corporate Bond BuyWrite Strategy ETF
What is LQDW?
LQDW uses a fund-of-fund approach to passively track an index that measures the performance of holding shares of the iShares iBoxx USD Investment Grade Corporate Bond ETF and writes one-month call options against the shares.
LQDW Factset Analytics Insight
LQDW is one of the first bond ETFs to utilize a buy-write strategy. The fund holds shares of the iShares iBoxx USD Investment Grade Corporate Bond ETF (ticker: LQD), one of the first bond ETFs offered in the US, and writes (sells) one-month covered call options. The objective is to provide additional income, in the form of option premium, along with the distributions received from the underlying bond portfolio. The fund will write call options up to the full amount of the shares being held in the portfolio. In doing so, the fund takes in option premium but forgoes the upside potential on the bonds at the strike price. The fund uses European-style options, which means the call options can only be exercised on the expiration date. This helps to roll the call options and reduces the chance the fund has to physically deliver underlying shares. This strategy may outperform in periods of rising rates and widening credit spreads. In periods of declining rates, the fund will likely underperform as compared to just holding investment grade bonds.
LQDW Summary Data
LQDW Portfolio Data
LQDW Index Data
LQDW Portfolio Management
LQDW Tax Exposures
LQDW Fund Structure
Factset Analytics Block Liquidity
This measurement shows how easy it is to trade a $1 million USD block of LQDW. LQDW is rated a N/A out of 5.
LQDW Sector/Industry Breakdown
LQDW Top 10 Holdings
LQDW Performance Statistics
LQDW Avg Life Maturity Distribution
LQDW OAS Breakdown
LQDW Holdings Statistics
Options Strategies for Outcome Investing
A collar strategy is a protective option strategy constructed by writing a call and buying a put with the same expiration date while being long the underlying security.
A covered call is an income strategy constructed by writing a call option against a holding of the underlying security.