LQD vs. IEFA
LQD (iShares iBoxx $ Investment Grade Corporate Bond ETF) and IEFA (iShares Core MSCI EAFE ETF) are both exchange-traded funds - LQD is a Corporate Bonds fund tracking the iBoxx $ Liquid Investment Grade Index, while IEFA is a Foreign Large Cap Equities fund tracking the MSCI EAFE IMI Index (Net). Both are passively managed. Over the past 10 years, LQD returned 2.41%/yr vs 9.37%/yr for IEFA. At a 0.18 correlation, their price movements are largely independent. LQD charges 0.15%/yr vs 0.07%/yr for IEFA.
Performance
LQD vs. IEFA - Performance Comparison
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Returns By Period
In the year-to-date period, LQD achieves a -0.06% return, which is significantly lower than IEFA's 7.49% return. Over the past 10 years, LQD has underperformed IEFA with an annualized return of 2.41%, while IEFA has yielded a comparatively higher 9.37% annualized return.
LQD
- 1D
- -0.10%
- 1M
- -0.67%
- YTD
- -0.06%
- 6M
- -0.06%
- 1Y
- 5.73%
- 3Y*
- 4.95%
- 5Y*
- -0.28%
- 10Y*
- 2.41%
IEFA
- 1D
- 0.63%
- 1M
- -1.17%
- YTD
- 7.49%
- 6M
- 10.04%
- 1Y
- 19.61%
- 3Y*
- 16.13%
- 5Y*
- 7.82%
- 10Y*
- 9.37%
LQD vs. IEFA - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|---|
LQD iShares iBoxx $ Investment Grade Corporate Bond ETF | -0.06% | 7.90% | 0.86% | 9.40% | -17.92% | -1.84% | 10.97% | 17.37% | -3.79% | 7.06% |
IEFA iShares Core MSCI EAFE ETF | 7.49% | 32.08% | 3.26% | 17.95% | -15.24% | 11.63% | 8.18% | 22.64% | -14.14% | 26.57% |
Correlation
The correlation between LQD and IEFA is 0.50, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.
| Correlation | |
|---|---|
Correlation (1Y) Calculated over the trailing 1-year period | 0.50 |
Correlation (3Y) Calculated over the trailing 3-year period | 0.44 |
Correlation (5Y) Calculated over the trailing 5-year period | 0.37 |
Correlation (10Y) Calculated over the trailing 10-year period | 0.27 |
Correlation (All Time) Calculated using the full available price history since Oct 25, 2012 | 0.18 |
Over the past year, LQD and IEFA have become more correlated (0.50) than their long-term average of 0.18, meaning their price movements have been converging.
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Return for Risk
LQD vs. IEFA — Risk / Return Rank
LQD
IEFA
LQD vs. IEFA - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) and iShares Core MSCI EAFE ETF (IEFA). 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.
| LQD | IEFA | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | -0.21 | ||
| Sortino ratioReturn per unit of downside risk | -0.29 | ||
| Omega ratioGain probability vs. loss probability | 1.19 | 1.24 | -0.05 |
| Calmar ratioReturn relative to maximum drawdown | 1.72 | 1.71 | +0.01 |
| Martin ratioReturn relative to average drawdown | 4.88 | 6.52 | -1.63 |
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month. | |||
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Sharpe Ratios by Period
| LQD | IEFA | Difference | |
|---|---|---|---|
Sharpe Ratio (1Y)Calculated over the trailing 1-year period | 1.08 | 1.30 | -0.21 |
Sharpe Ratio (5Y)Calculated over the trailing 5-year period | -0.03 | 0.47 | -0.51 |
Sharpe Ratio (10Y)Calculated over the trailing 10-year period | 0.28 | 0.54 | -0.26 |
Sharpe Ratio (All Time)Calculated using the full available price history | 0.54 | 0.50 | +0.03 |
Drawdowns
LQD vs. IEFA - Drawdown Comparison
The maximum LQD drawdown since its inception was -24.95%, smaller than the maximum IEFA drawdown of -34.78%. Use the drawdown chart below to compare losses from any high point for LQD and IEFA.
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Drawdown Indicators
| LQD | IEFA | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -24.95% | -34.78% | +9.83% |
Max Drawdown (1Y)Largest decline over 1 year | -3.34% | -11.50% | +8.16% |
Max Drawdown (3Y)Largest decline over 3 years | -8.43% | -13.76% | +5.33% |
Max Drawdown (5Y)Largest decline over 5 years | -24.95% | -30.41% | +5.46% |
Max Drawdown (10Y)Largest decline over 10 years | -24.95% | -34.78% | +9.83% |
Current DrawdownCurrent decline from peak | -4.21% | -2.44% | -1.77% |
Average DrawdownAverage peak-to-trough decline | -3.99% | -6.69% | +2.70% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 1.18% | 3.02% | -1.84% |
Volatility
LQD vs. IEFA - Volatility Comparison
The current volatility for iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) is 1.62%, while iShares Core MSCI EAFE ETF (IEFA) has a volatility of 4.54%. This indicates that LQD experiences smaller price fluctuations and is considered to be less risky than IEFA based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| LQD | IEFA | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 1.62% | 4.54% | -2.92% |
Volatility (6M)Calculated over the trailing 6-month period | 3.94% | 12.74% | -8.80% |
Volatility (1Y)Calculated over the trailing 1-year period | 5.32% | 15.22% | -9.90% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 8.65% | 16.55% | -7.90% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 8.68% | 17.32% | -8.64% |
LQD vs. IEFA - Expense Ratio Comparison
LQD has a 0.15% expense ratio, which is higher than IEFA's 0.07% expense ratio. However, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.
Dividends
LQD vs. IEFA - Dividend Comparison
LQD's dividend yield for the trailing twelve months is around 4.59%, more than IEFA's 3.30% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
IEFA iShares Core MSCI EAFE ETF | 3.30% | 3.55% | 3.47% | 3.20% | 2.70% | 3.32% | 1.90% | 3.18% | 3.46% | 2.57% | 2.96% | 2.63% |
LQD iShares iBoxx $ Investment Grade Corporate Bond ETF | 4.59% | 4.48% | 4.45% | 3.99% | 3.30% | 2.30% | 2.66% | 3.29% | 3.67% | 3.10% | 3.34% | 3.47% |
Frequently Asked Questions
LQD and IEFA have a correlation of 0.50, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.
IEFA has higher volatility (4.54%) compared to LQD (1.62%). In terms of maximum drawdown, LQD dropped -24.95% vs IEFA's -34.78%.
On 10-year performance, IEFA leads with 9.37% vs 2.41% for LQD. On fees, IEFA is cheaper at 0.07% per year. On volatility, LQD has been the lower-risk option at 1.62%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 10-year period, IEFA has performed better with a 9.37% return vs 2.41%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
IEFA is cheaper with a 0.07% expense ratio, compared with 0.15% for LQD.
LQD has the higher dividend yield at 4.59%, compared with 3.30% for IEFA.
LQD is categorized as Corporate Bonds, while IEFA is Foreign Large Cap Equities. LQD tracks iBoxx $ Liquid Investment Grade Index, while IEFA tracks MSCI EAFE IMI Index (Net). Their fees differ too: 0.15% for LQD and 0.07% for IEFA.
IEFA currently has the higher Sharpe Ratio (1.30 vs 1.08), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.
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