LQD vs. VCIT
Compare and contrast key facts about iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) and Vanguard Intermediate-Term Corporate Bond ETF (VCIT).
LQD and VCIT 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. VCIT is a passively managed fund by Vanguard that tracks the performance of the Barclays U.S. 5-10 Year Corp Index. It was launched on Nov 19, 2009. Both LQD and VCIT 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 VCIT.
Key characteristics
| LQD | VCIT | |
|---|---|---|
| YTD Return | -2.40% | -1.08% |
| 1Y Return | 1.97% | 2.90% |
| 3Y Return (Ann) | -3.53% | -2.17% |
| 5Y Return (Ann) | 0.98% | 1.47% |
| 10Y Return (Ann) | 2.24% | 2.55% |
| Sharpe Ratio | 0.19 | 0.40 |
| Daily Std Dev | 8.88% | 6.95% |
| Max Drawdown | -24.95% | -20.56% |
| Current Drawdown | -14.04% | -9.11% |
Correlation
The correlation between LQD and VCIT is 0.88, which is considered to be high. That indicates a strong positive relationship between their price movements. Having highly-correlated positions in a portfolio may signal a lack of diversification, potentially leading to increased risk during market downturns.
Performance
LQD vs. VCIT - Performance Comparison
In the year-to-date period, LQD achieves a -2.40% return, which is significantly lower than VCIT's -1.08% return. Over the past 10 years, LQD has underperformed VCIT with an annualized return of 2.24%, while VCIT has yielded a comparatively higher 2.55% 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. VCIT - Expense Ratio Comparison
LQD has a 0.15% expense ratio, which is higher than VCIT's 0.04% 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%.
Risk-Adjusted Performance
LQD vs. VCIT - Risk-Adjusted Performance Comparison
This table presents a comparison of risk-adjusted performance metrics for iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) and Vanguard Intermediate-Term Corporate Bond ETF (VCIT). 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. VCIT - Dividend Comparison
LQD's dividend yield for the trailing twelve months is around 4.33%, more than VCIT's 4.08% yield.
| TTM | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
LQD iShares iBoxx $ Investment Grade Corporate Bond ETF | 4.33% | 3.99% | 3.30% | 2.30% | 2.66% | 3.29% | 3.67% | 3.10% | 3.34% | 3.47% | 3.39% | 3.83% |
VCIT Vanguard Intermediate-Term Corporate Bond ETF | 4.08% | 3.72% | 3.03% | 2.87% | 2.78% | 3.37% | 3.61% | 3.21% | 3.29% | 3.34% | 3.34% | 4.00% |
Drawdowns
LQD vs. VCIT - Drawdown Comparison
The maximum LQD drawdown since its inception was -24.95%, which is greater than VCIT's maximum drawdown of -20.56%. Use the drawdown chart below to compare losses from any high point for LQD and VCIT. For additional features, visit the drawdowns tool.
Volatility
LQD vs. VCIT - Volatility Comparison
iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) has a higher volatility of 2.56% compared to Vanguard Intermediate-Term Corporate Bond ETF (VCIT) at 2.06%. This indicates that LQD's price experiences larger fluctuations and is considered to be riskier than VCIT based on this measure. The chart below showcases a comparison of their rolling one-month volatility.