LQD vs. HYG
Compare and contrast key facts about iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) and iShares iBoxx $ High Yield Corporate Bond ETF (HYG).
LQD and HYG are both exchange-traded funds (ETFs), meaning they are traded on stock exchanges and can be bought and sold throughout the day. LQD is a passively managed fund by iShares that tracks the performance of the iBoxx $ Liquid Investment Grade Index. It was launched on Jul 26, 2002. HYG is a passively managed fund by iShares that tracks the performance of the iBoxx $ Liquid High Yield Index. It was launched on Apr 11, 2007. Both LQD and HYG are passive ETFs, meaning that they are not actively managed but aim to replicate the performance of the underlying index as closely as possible.
Scroll down to visually compare performance, riskiness, drawdowns, and other indicators and decide which better suits your portfolio: LQD or HYG.
Key characteristics
| LQD | HYG | |
|---|---|---|
| YTD Return | -2.12% | 1.84% |
| 1Y Return | 2.66% | 9.68% |
| 3Y Return (Ann) | -3.56% | 1.13% |
| 5Y Return (Ann) | 1.09% | 2.97% |
| 10Y Return (Ann) | 2.28% | 3.28% |
| Sharpe Ratio | 0.25 | 1.65 |
| Daily Std Dev | 8.89% | 6.21% |
| Max Drawdown | -24.95% | -34.24% |
| Current Drawdown | -13.80% | 0.00% |
Correlation
The correlation between LQD and HYG is 0.26, which is considered to be low. This implies their price changes are not closely related. A low correlation is generally favorable for portfolio diversification, as it helps to reduce overall risk by spreading it across multiple assets with different performance patterns.
Performance
LQD vs. HYG - Performance Comparison
In the year-to-date period, LQD achieves a -2.12% return, which is significantly lower than HYG's 1.84% return. Over the past 10 years, LQD has underperformed HYG with an annualized return of 2.28%, while HYG has yielded a comparatively higher 3.28% annualized return. The chart below displays the growth of a $10,000 investment in both assets, with all prices adjusted for splits and dividends.
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LQD vs. HYG - Expense Ratio Comparison
LQD has a 0.15% expense ratio, which is lower than HYG's 0.49% expense ratio.
Risk-Adjusted Performance
LQD vs. HYG - Risk-Adjusted Performance Comparison
This table presents a comparison of risk-adjusted performance metrics for iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) and iShares iBoxx $ High Yield Corporate Bond ETF (HYG). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.
Dividends
LQD vs. HYG - Dividend Comparison
LQD's dividend yield for the trailing twelve months is around 4.31%, less than HYG's 5.93% yield.
| TTM | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
LQD iShares iBoxx $ Investment Grade Corporate Bond ETF | 4.31% | 3.99% | 3.30% | 2.30% | 2.66% | 3.29% | 3.67% | 3.10% | 3.34% | 3.47% | 3.39% | 3.83% |
HYG iShares iBoxx $ High Yield Corporate Bond ETF | 5.93% | 5.74% | 5.30% | 4.02% | 4.88% | 4.99% | 5.54% | 5.12% | 5.27% | 5.90% | 5.69% | 6.10% |
Drawdowns
LQD vs. HYG - Drawdown Comparison
The maximum LQD drawdown since its inception was -24.95%, smaller than the maximum HYG drawdown of -34.24%. Use the drawdown chart below to compare losses from any high point for LQD and HYG. For additional features, visit the drawdowns tool.
Volatility
LQD vs. HYG - Volatility Comparison
iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) has a higher volatility of 2.55% compared to iShares iBoxx $ High Yield Corporate Bond ETF (HYG) at 1.91%. This indicates that LQD's price experiences larger fluctuations and is considered to be riskier than HYG based on this measure. The chart below showcases a comparison of their rolling one-month volatility.