iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD): Complete Beginner's Guide
iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) is a investment grade corporate bond ETF from BlackRock with an expense ratio of 0.14% and $35.0B in assets under management. Our Beginner Suitability Score: 10/10 (Great for Beginners). 5-year annualized return: 1.20%.
Last updated: April 2026
BlackRock • Investment Grade Corporate Bond
Expense Ratio
0.14%
AUM
$35.0B
Dividend Yield
4.50%
Inception
2002
Beginner Score
10/10
What is iShares iBoxx $ Investment Grade Corporate Bond ETF?
LQD invests in investment-grade corporate bonds issued by high-quality U.S. companies with strong credit ratings. It offers a yield premium over Treasury bonds because corporate bonds carry slightly more risk. Beginners use LQD to earn more income than government bonds while still maintaining relatively high credit quality and lower volatility than high-yield or stock investments.
LQD is managed by BlackRock and has been available since 2002. With $35.0B in assets under management, it's a well-established fund with strong institutional backing. The fund charges an expense ratio of 0.14%, which means for every $10,000 you invest, you pay approximately $14 per year in management fees.
LQD at a Glance — Key Metrics
| Expense Ratio | 0.14% |
| Total Holdings | 2,700 |
| P/E Ratio | N/A |
| Beta | 0.15 |
| Dividend Yield | 4.50% |
| AUM | $35.0B |
| Inception Year | 2002 |
| Issuer | BlackRock |
Top 10 Holdings in LQD
LQD holds 2,700 different securities. Here are the largest positions that make up the core of this fund:
| # | Company | Ticker | Weight |
|---|---|---|---|
| 1 | Goldman Sachs 5.15% 2034 | N/A | 0.60% |
| 2 | Bank of America 5.0% 2033 | N/A | 0.50% |
| 3 | JPMorgan Chase 4.85% 2035 | N/A | 0.50% |
| 4 | Morgan Stanley 5.25% 2034 | N/A | 0.50% |
| 5 | Apple Inc. 3.85% 2043 | N/A | 0.40% |
| 6 | Microsoft Corp. 3.5% 2042 | N/A | 0.40% |
| 7 | Citigroup Inc. 4.95% 2033 | N/A | 0.40% |
| 8 | AT&T Inc. 4.35% 2045 | N/A | 0.40% |
| 9 | Verizon Comm. 4.5% 2033 | N/A | 0.30% |
| 10 | Amazon.com 4.25% 2044 | N/A | 0.30% |
LQD's top holding is Goldman Sachs 5.15% 2034 (N/A) at 0.60%, followed by Bank of America 5.0% 2033 (N/A) at 0.50% and JPMorgan Chase 4.85% 2035 (N/A) at 0.50%. The top 10 holdings account for 4.30% of the fund's 2,700 total positions.
View data table
| Rank | Company | Ticker | Weight |
|---|---|---|---|
| 1 | Goldman Sachs 5.15% 2034 | N/A | 0.60% |
| 2 | Bank of America 5.0% 2033 | N/A | 0.50% |
| 3 | JPMorgan Chase 4.85% 2035 | N/A | 0.50% |
| 4 | Morgan Stanley 5.25% 2034 | N/A | 0.50% |
| 5 | Apple Inc. 3.85% 2043 | N/A | 0.40% |
| 6 | Microsoft Corp. 3.5% 2042 | N/A | 0.40% |
| 7 | Citigroup Inc. 4.95% 2033 | N/A | 0.40% |
| 8 | AT&T Inc. 4.35% 2045 | N/A | 0.40% |
| 9 | Verizon Comm. 4.5% 2033 | N/A | 0.30% |
| 10 | Amazon.com 4.25% 2044 | N/A | 0.30% |
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LQD Performance History
Here's how LQD has performed over different time periods. Remember that past performance doesn't guarantee future results, but it gives you a sense of the fund's track record:
YTD
0.60%
1 Year
4.20%
3 Year
-0.50%
5 Year
1.20%
10 Year
2.50%
LQD has returned 1.20% annualized over 5 years and 2.50% over 10 years. YTD return is 0.60%.
View data table
| Period | Return |
|---|---|
| YTD | 0.60% |
| 1 Year | 4.20% |
| 3 Year | -0.50% |
| 5 Year | 1.20% |
| 10 Year | 2.50% |
Beginner Suitability Score: 10/10
Our proprietary Beginner Suitability Score evaluates ETFs based on five factors that matter most to new investors: fees, volatility, diversification, dividend history, and track record length.
LQD scores 10/10 because it has very low fees, shows lower-than-average volatility, offers broad diversification across 2,700 holdings, and has been available since 2002, giving it a proven track record.
How to Buy LQD — Step by Step
- Open a brokerage account — We recommend Fidelity, Charles Schwab, or Vanguard for ETF investing. All offer $0 commissions on ETF trades.
- Fund your account — Transfer money from your bank. You can start with as little as $1 if your broker offers fractional shares.
- Search for "LQD" — Use the search bar in your brokerage platform to find iShares iBoxx $ Investment Grade Corporate Bond ETF.
- Place your order — Choose "Market Order" for simplicity or "Limit Order" if you want to set a specific price. Enter how many shares (or dollar amount) you want to buy.
- Set up automatic investing — Most brokers let you schedule recurring purchases (e.g., $100/month on the 1st). This is dollar cost averaging in action.
LQD Sector Allocation
Here's how LQD distributes its investments across different sectors of the economy:
LQD's largest sector allocation is Financial Institutions Bond at 31.5%, followed by Consumer Non-Cyclical Bond at 14.2% and Communication Services Bond at 11.5%.
View data table
| Sector | Weight |
|---|---|
| Financial Institutions Bond | 31.5% |
| Consumer Non-Cyclical Bond | 14.2% |
| Communication Services Bond | 11.5% |
| Technology Bond | 9.8% |
| Energy Bond | 8.8% |
| Capital Goods Bond | 7.8% |
| Consumer Cyclical Bond | 6.5% |
| Utility Bond | 5.8% |
| Health Care Bond | 4.1% |
Dollar Cost Averaging Into LQD
Here's what consistent monthly investing could look like over time, assuming an average annual return of 8% (approximate historical stock market average):
| Monthly | 10 Years | 20 Years | 30 Years |
|---|---|---|---|
| $100/mo | $18,417 | $59,295 | $150,030 |
| $250/mo | $46,041 | $148,237 | $375,074 |
| $500/mo | $92,083 | $296,474 | $750,148 |
*Projections assume 8% average annual return with monthly compounding. Actual returns will vary. Past performance doesn't guarantee future results.
Fee impact: With LQD's expense ratio of 0.14%, a $10,000 investment would lose approximately $1,194 to fees over 20 years compared to a zero-fee investment. This is significant — consider whether the fund's strategy justifies these costs.
LQD's expense ratio of 0.14% costs $1,194 on a $10,000 investment over 20 years (assuming 8% annual return). Without fees, the investment would grow to $46,610 instead of $45,416.
View data table
| Year | Without Fees | With Fees | Fee Cost |
|---|---|---|---|
| 0 | $10,000 | $10,000 | $0 |
| 5 | $14,693 | $14,598 | $95 |
| 10 | $21,589 | $21,311 | $278 |
| 15 | $31,722 | $31,110 | $612 |
| 20 | $46,610 | $45,416 | $1,194 |
Pros and Cons of LQD
Pros
- ✓Higher yield than Treasury bonds while maintaining investment-grade credit quality
- ✓Over 2,700 holdings provide excellent diversification across corporate issuers and sectors
- ✓Monthly income payments make it practical for retirees and income-focused portfolios
- ✓Large asset base and high trading volume ensure tight spreads and easy execution
Cons
- ✗Duration risk means it loses value when interest rates rise, similar to government bond funds
- ✗Corporate bonds carry credit downgrade risk that can reduce prices even without defaults
- ✗Expense ratio of 0.14% is higher than comparable Treasury or aggregate bond funds
LQD vs Similar ETFs
See how LQD stacks up against similar funds:
Frequently Asked Questions
Is LQD a good ETF for beginners?▾
LQD has a Beginner Suitability Score of 10/10 on our scale. This makes it a strong choice for new investors due to its low fees and broad diversification.
What is the expense ratio of LQD?▾
LQD has an expense ratio of 0.14%. This means for every $10,000 you invest, you pay approximately $14 per year in fees. This is considered very low and cost-efficient.
How much money do I need to invest in LQD?▾
You can invest in LQD with as little as $1 through brokers that offer fractional shares (like Fidelity, Schwab, or Robinhood). There is no minimum investment required beyond the share price itself, which changes daily. Dollar cost averaging — investing a fixed amount regularly — is a popular strategy.
Does LQD pay dividends?▾
Yes, LQD pays dividends with a current yield of approximately 4.50%. Dividends are typically paid quarterly and can be reinvested automatically through most brokers.
What are the top holdings in LQD?▾
The top holdings in LQD include Goldman Sachs 5.15% 2034 (0.60%), Bank of America 5.0% 2033 (0.50%), JPMorgan Chase 4.85% 2035 (0.50%), and more. The fund holds 2,700 total positions, providing broad diversification across many companies.
What sectors does LQD invest in?▾
LQD's largest sector allocations are Financial Institutions Bond (31.50%), Consumer Non-Cyclical Bond (14.20%), Communication Services Bond (11.50%). This sector distribution shows a focus on financial institutions bond stocks.
How much do LQD's fees cost over time?▾
With an expense ratio of 0.14%, a $10,000 investment in LQD would lose approximately $1,194 to fees over 20 years (assuming 8% annual returns). Consider whether the fund's strategy justifies these costs.