LQD vs. TIP
LQD (iShares iBoxx $ Investment Grade Corporate Bond ETF) and TIP (iShares TIPS Bond ETF) are both exchange-traded funds - LQD is a Corporate Bonds fund tracking the iBoxx $ Liquid Investment Grade Index, while TIP is a Inflation-Protected Bonds fund tracking the ICE U.S. Treasury Inflation Linked Bond Index. Both are passively managed. Over the past 10 years, LQD returned 2.41%/yr vs 2.45%/yr for TIP. A 0.67 correlation means they provide meaningful diversification when combined. LQD charges 0.15%/yr vs 0.18%/yr for TIP.
Performance
LQD vs. TIP - 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 TIP's 0.95% return. Both investments have delivered pretty close results over the past 10 years, with LQD having a 2.41% annualized return and TIP not far ahead at 2.45%.
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%
TIP
- 1D
- -0.11%
- 1M
- -0.90%
- YTD
- 0.95%
- 6M
- 0.97%
- 1Y
- 4.81%
- 3Y*
- 3.70%
- 5Y*
- 0.88%
- 10Y*
- 2.45%
LQD vs. TIP - 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% |
TIP iShares TIPS Bond ETF | 0.95% | 6.77% | 1.65% | 3.80% | -12.26% | 5.68% | 10.84% | 8.35% | -1.42% | 2.92% |
Correlation
The correlation between LQD and TIP is 0.79, 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 | 0.79 |
Correlation (3Y) Calculated over the trailing 3-year period | 0.85 |
Correlation (5Y) Calculated over the trailing 5-year period | 0.77 |
Correlation (10Y) Calculated over the trailing 10-year period | 0.74 |
Correlation (All Time) Calculated using the full available price history since Dec 5, 2003 | 0.67 |
The correlation between LQD and TIP shifts across timeframes, from 0.67 (all time) to 0.85 (3 years), reflecting how their relationship changes across market environments.
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Return for Risk
LQD vs. TIP — Risk / Return Rank
LQD
TIP
LQD vs. TIP - 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 TIPS Bond ETF (TIP). 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 | TIP | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | -0.35 | ||
| Sortino ratioReturn per unit of downside risk | -0.62 | ||
| Omega ratioGain probability vs. loss probability | 1.19 | 1.26 | -0.07 |
| Calmar ratioReturn relative to maximum drawdown | 1.72 | 2.45 | -0.72 |
| Martin ratioReturn relative to average drawdown | 4.88 | 7.37 | -2.48 |
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 | TIP | Difference | |
|---|---|---|---|
Sharpe Ratio (1Y)Calculated over the trailing 1-year period | 1.08 | 1.43 | -0.35 |
Sharpe Ratio (5Y)Calculated over the trailing 5-year period | -0.03 | 0.14 | -0.17 |
Sharpe Ratio (10Y)Calculated over the trailing 10-year period | 0.28 | 0.43 | -0.15 |
Sharpe Ratio (All Time)Calculated using the full available price history | 0.54 | 0.57 | -0.03 |
Drawdowns
LQD vs. TIP - Drawdown Comparison
The maximum LQD drawdown since its inception was -24.95%, which is greater than TIP's maximum drawdown of -14.57%. Use the drawdown chart below to compare losses from any high point for LQD and TIP.
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Drawdown Indicators
| LQD | TIP | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -24.95% | -14.57% | -10.38% |
Max Drawdown (1Y)Largest decline over 1 year | -3.34% | -1.98% | -1.36% |
Max Drawdown (3Y)Largest decline over 3 years | -8.43% | -4.54% | -3.89% |
Max Drawdown (5Y)Largest decline over 5 years | -24.95% | -14.51% | -10.44% |
Max Drawdown (10Y)Largest decline over 10 years | -24.95% | -14.51% | -10.44% |
Current DrawdownCurrent decline from peak | -4.21% | -0.90% | -3.31% |
Average DrawdownAverage peak-to-trough decline | -3.99% | -3.43% | -0.56% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 1.18% | 0.65% | +0.53% |
Volatility
LQD vs. TIP - Volatility Comparison
iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) has a higher volatility of 1.62% compared to iShares TIPS Bond ETF (TIP) at 1.01%. This indicates that LQD's price experiences larger fluctuations and is considered to be riskier than TIP based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| LQD | TIP | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 1.62% | 1.01% | +0.61% |
Volatility (6M)Calculated over the trailing 6-month period | 3.94% | 2.33% | +1.61% |
Volatility (1Y)Calculated over the trailing 1-year period | 5.32% | 3.38% | +1.94% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 8.65% | 6.21% | +2.44% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 8.68% | 5.74% | +2.94% |
LQD vs. TIP - Expense Ratio Comparison
LQD has a 0.15% expense ratio, which is lower than TIP's 0.18% 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. TIP - Dividend Comparison
LQD's dividend yield for the trailing twelve months is around 4.59%, more than TIP's 3.78% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
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% |
TIP iShares TIPS Bond ETF | 3.78% | 3.46% | 2.52% | 2.73% | 6.96% | 4.28% | 1.17% | 1.75% | 2.71% | 2.07% | 1.48% | 0.34% |
Frequently Asked Questions
LQD and TIP have a correlation of 0.79, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.
LQD has higher volatility (1.62%) compared to TIP (1.01%). In terms of maximum drawdown, LQD dropped -24.95% vs TIP's -14.57%.
On 10-year performance, TIP leads with 2.45% vs 2.41% for LQD. On fees, LQD is cheaper at 0.15% per year. On volatility, TIP has been the lower-risk option at 1.01%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 10-year period, TIP has performed better with a 2.45% return vs 2.41%. 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 0.18% for TIP.
LQD has the higher dividend yield at 4.59%, compared with 3.78% for TIP.
LQD is categorized as Corporate Bonds, while TIP is Inflation-Protected Bonds. LQD tracks iBoxx $ Liquid Investment Grade Index, while TIP tracks ICE U.S. Treasury Inflation Linked Bond Index. Their fees differ too: 0.15% for LQD and 0.18% for TIP.
TIP currently has the higher Sharpe Ratio (1.43 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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