LQD vs. PAAA
LQD (iShares iBoxx $ Investment Grade Corporate Bond ETF) and PAAA (PGIM AAA CLO ETF) are both exchange-traded funds - LQD is a Corporate Bonds fund tracking the iBoxx $ Liquid Investment Grade Index, while PAAA is a CLO fund actively managed by PGIM. LQD is passively managed, while PAAA is actively managed. Over the past year, LQD returned 5.16% vs 5.14% for PAAA. At a correlation of -0.01, they often move in opposite directions. LQD charges 0.15%/yr vs 0.19%/yr for PAAA.
Performance
LQD vs. PAAA - Performance Comparison
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Returns By Period
In the year-to-date period, LQD achieves a 0.82% return, which is significantly lower than PAAA's 2.14% return.
LQD
- 1D
- -0.06%
- 1M
- 0.74%
- YTD
- 0.82%
- 6M
- 1.24%
- 1Y
- 5.16%
- 3Y*
- 5.30%
- 5Y*
- -0.21%
- 10Y*
- 2.54%
PAAA
- 1D
- 0.00%
- 1M
- 0.36%
- YTD
- 2.14%
- 6M
- 2.42%
- 1Y
- 5.14%
- 3Y*
- —
- 5Y*
- —
- 10Y*
- —
LQD vs. PAAA - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | |
|---|---|---|---|---|
LQD iShares iBoxx $ Investment Grade Corporate Bond ETF | 0.82% | 7.90% | 0.86% | 5.05% |
PAAA PGIM AAA CLO ETF | 2.14% | 5.37% | 7.47% | 3.83% |
Correlation
The correlation between LQD and PAAA is 0.11, which is low. Their price movements are largely independent, making them effective diversification partners.
| Correlation | |
|---|---|
Correlation (1Y) Calculated over the trailing 1-year period | 0.11 |
Correlation (All Time) Calculated using the full available price history since Jul 26, 2023 | -0.01 |
The correlation between LQD and PAAA shifts across timeframes, from -0.01 (all time) to 0.11 (1 year), reflecting how their relationship changes across market environments.
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Return for Risk
LQD vs. PAAA — Risk / Return Rank
LQD
PAAA
LQD vs. PAAA - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) and PGIM AAA CLO ETF (PAAA). 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.
Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.
| LQD | PAAA | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | -9.97 | ||
| Sortino ratioReturn per unit of downside risk | -19.97 | ||
| Omega ratioGain probability vs. loss probability | 1.17 | 6.66 | -5.50 |
| Calmar ratioReturn relative to maximum drawdown | 1.55 | 29.67 | -28.11 |
| Martin ratioReturn relative to average drawdown | 4.37 | 183.78 | -179.41 |
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Drawdowns
LQD vs. PAAA - Drawdown Comparison
The maximum LQD drawdown since its inception was -24.95%, which is greater than PAAA's maximum drawdown of -1.04%. Use the drawdown chart below to compare losses from any high point for LQD and PAAA.
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Drawdown Indicators
| LQD | PAAA | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -24.95% | -1.04% | -23.91% |
Max Drawdown (1Y)Largest decline over 1 year | -3.34% | -0.17% | -3.17% |
Max Drawdown (3Y)Largest decline over 3 years | -8.43% | — | — |
Max Drawdown (5Y)Largest decline over 5 years | -24.95% | — | — |
Max Drawdown (10Y)Largest decline over 10 years | -24.95% | — | — |
Current DrawdownCurrent decline from peak | -3.37% | 0.00% | -3.37% |
Average DrawdownAverage peak-to-trough decline | -3.99% | -0.02% | -3.97% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 1.19% | 0.03% | +1.16% |
Volatility
LQD vs. PAAA - Volatility Comparison
iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) has a higher volatility of 1.78% compared to PGIM AAA CLO ETF (PAAA) at 0.11%. This indicates that LQD's price experiences larger fluctuations and is considered to be riskier than PAAA based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| LQD | PAAA | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 1.78% | 0.11% | +1.67% |
Volatility (6M)Calculated over the trailing 6-month period | 4.02% | 0.35% | +3.67% |
Volatility (1Y)Calculated over the trailing 1-year period | 5.37% | 0.47% | +4.90% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 8.65% | 0.97% | +7.68% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 8.69% | 0.97% | +7.72% |
LQD vs. PAAA - Expense Ratio Comparison
LQD has a 0.15% expense ratio, which is lower than PAAA's 0.19% expense ratio. Despite the difference, 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. PAAA - Dividend Comparison
LQD's dividend yield for the trailing twelve months is around 4.55%, less than PAAA's 4.88% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
LQD iShares iBoxx $ Investment Grade Corporate Bond ETF | 4.55% | 4.48% | 4.45% | 3.99% | 3.30% | 2.30% | 2.66% | 3.29% | 3.67% | 3.10% | 3.34% | 3.47% |
PAAA PGIM AAA CLO ETF | 4.88% | 5.12% | 5.88% | 2.76% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
Frequently Asked Questions
LQD and PAAA have a correlation of 0.11, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.
LQD has higher volatility (1.78%) compared to PAAA (0.11%). In terms of maximum drawdown, LQD dropped -24.95% vs PAAA's -1.04%.
On 1-year performance, LQD leads with 5.16% vs 5.14% for PAAA. On fees, LQD is cheaper at 0.15% per year. On volatility, PAAA has been the lower-risk option at 0.11%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 1-year period, LQD has performed better with a 5.16% return vs 5.14%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
LQD is cheaper with a 0.15% expense ratio, compared with 0.19% for PAAA.
PAAA has the higher dividend yield at 4.88%, compared with 4.55% for LQD.
LQD is categorized as Corporate Bonds, while PAAA is CLO. They also come from different issuers: iShares and PGIM. Their fees differ too: 0.15% for LQD and 0.19% for PAAA.
PAAA currently has the higher Sharpe Ratio (10.94 vs 0.97), 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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