LQD vs. PFF
LQD (iShares iBoxx $ Investment Grade Corporate Bond ETF) and PFF (iShares Preferred and Income Securities ETF) are both exchange-traded funds - LQD is a Corporate Bonds fund tracking the iBoxx $ Liquid Investment Grade Index, while PFF is a Preferred Stock/Convertible Bonds fund tracking the ICE Exchange-Listed Preferred & Hybrid Securities Index. Both are passively managed. Over the past 10 years, LQD returned 2.54%/yr vs 3.35%/yr for PFF. At a 0.30 correlation, their price movements are largely independent. LQD charges 0.15%/yr vs 0.46%/yr for PFF.
Performance
LQD vs. PFF - 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 PFF's 2.40% return. Over the past 10 years, LQD has underperformed PFF with an annualized return of 2.54%, while PFF has yielded a comparatively higher 3.35% annualized 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%
PFF
- 1D
- 0.16%
- 1M
- -1.18%
- YTD
- 2.40%
- 6M
- 2.42%
- 1Y
- 8.18%
- 3Y*
- 6.77%
- 5Y*
- 1.32%
- 10Y*
- 3.35%
LQD vs. PFF - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|---|
LQD iShares iBoxx $ Investment Grade Corporate Bond ETF | 0.82% | 7.90% | 0.86% | 9.40% | -17.92% | -1.84% | 10.97% | 17.37% | -3.79% | 7.06% |
PFF iShares Preferred and Income Securities ETF | 2.40% | 4.87% | 7.24% | 9.22% | -18.19% | 7.15% | 7.89% | 15.93% | -4.64% | 8.10% |
Correlation
The correlation between LQD and PFF is 0.56, 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 | 0.56 |
Correlation (3Y) Calculated over the trailing 3-year period | 0.62 |
Correlation (5Y) Calculated over the trailing 5-year period | 0.56 |
Correlation (10Y) Calculated over the trailing 10-year period | 0.47 |
Correlation (All Time) Calculated using the full available price history since Mar 30, 2007 | 0.30 |
Over the past year, LQD and PFF have become more correlated (0.56) than their long-term average of 0.30, meaning their price movements have been converging.
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Return for Risk
LQD vs. PFF — Risk / Return Rank
LQD
PFF
LQD vs. PFF - 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 Preferred and Income Securities ETF (PFF). 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 | PFF | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | -0.22 | ||
| Sortino ratioReturn per unit of downside risk | -0.29 | ||
| Omega ratioGain probability vs. loss probability | 1.17 | 1.21 | -0.04 |
| Calmar ratioReturn relative to maximum drawdown | 1.55 | 1.56 | 0.00 |
| Martin ratioReturn relative to average drawdown | 4.37 | 4.75 | -0.38 |
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Drawdowns
LQD vs. PFF - Drawdown Comparison
The maximum LQD drawdown since its inception was -24.95%, smaller than the maximum PFF drawdown of -65.55%. Use the drawdown chart below to compare losses from any high point for LQD and PFF.
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Drawdown Indicators
| LQD | PFF | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -24.95% | -65.55% | +40.60% |
Max Drawdown (1Y)Largest decline over 1 year | -3.34% | -5.28% | +1.94% |
Max Drawdown (3Y)Largest decline over 3 years | -8.43% | -10.63% | +2.20% |
Max Drawdown (5Y)Largest decline over 5 years | -24.95% | -21.05% | -3.90% |
Max Drawdown (10Y)Largest decline over 10 years | -24.95% | -34.10% | +9.15% |
Current DrawdownCurrent decline from peak | -3.37% | -1.62% | -1.75% |
Average DrawdownAverage peak-to-trough decline | -3.99% | -5.76% | +1.77% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 1.19% | 1.73% | -0.54% |
Volatility
LQD vs. PFF - Volatility Comparison
The current volatility for iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) is 1.78%, while iShares Preferred and Income Securities ETF (PFF) has a volatility of 2.29%. This indicates that LQD experiences smaller price fluctuations and is considered to be less risky than PFF based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| LQD | PFF | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 1.78% | 2.29% | -0.51% |
Volatility (6M)Calculated over the trailing 6-month period | 4.02% | 5.21% | -1.19% |
Volatility (1Y)Calculated over the trailing 1-year period | 5.37% | 6.88% | -1.51% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 8.65% | 10.32% | -1.67% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 8.69% | 12.67% | -3.98% |
LQD vs. PFF - Expense Ratio Comparison
LQD has a 0.15% expense ratio, which is lower than PFF's 0.46% expense ratio.
Dividends
LQD vs. PFF - Dividend Comparison
LQD's dividend yield for the trailing twelve months is around 4.55%, less than PFF's 5.50% 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% |
PFF iShares Preferred and Income Securities ETF | 5.50% | 6.30% | 6.32% | 6.63% | 6.01% | 4.45% | 4.79% | 5.31% | 6.32% | 5.59% | 5.85% | 5.76% |
Frequently Asked Questions
LQD and PFF have a correlation of 0.56, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.
PFF has higher volatility (2.29%) compared to LQD (1.78%). In terms of maximum drawdown, LQD dropped -24.95% vs PFF's -65.55%.
On 10-year performance, PFF leads with 3.35% vs 2.54% for LQD. On fees, LQD is cheaper at 0.15% per year. On volatility, LQD has been the lower-risk option at 1.78%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 10-year period, PFF has performed better with a 3.35% return vs 2.54%. 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 0.46% for PFF.
PFF has the higher dividend yield at 5.50%, compared with 4.55% for LQD.
LQD is categorized as Corporate Bonds, while PFF is Preferred Stock/Convertible Bonds. LQD tracks iBoxx $ Liquid Investment Grade Index, while PFF tracks ICE Exchange-Listed Preferred & Hybrid Securities Index. Their fees differ too: 0.15% for LQD and 0.46% for PFF.
PFF currently has the higher Sharpe Ratio (1.19 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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