LQD vs. VCSH
Compare and contrast key facts about iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) and Vanguard Short-Term Corporate Bond ETF (VCSH).
LQD and VCSH 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. VCSH is a passively managed fund by Vanguard that tracks the performance of the Barclays Capital U.S. 1-5 Year Corporate Index. It was launched on Nov 19, 2009. Both LQD and VCSH 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 VCSH.
Key characteristics
| LQD | VCSH | |
|---|---|---|
| YTD Return | -2.40% | 0.68% |
| 1Y Return | 1.97% | 4.11% |
| 3Y Return (Ann) | -3.53% | 0.17% |
| 5Y Return (Ann) | 0.98% | 1.86% |
| 10Y Return (Ann) | 2.24% | 1.99% |
| Sharpe Ratio | 0.19 | 1.41 |
| Daily Std Dev | 8.88% | 2.95% |
| Max Drawdown | -24.95% | -12.86% |
| Current Drawdown | -14.04% | -0.17% |
Correlation
The correlation between LQD and VCSH is 0.69, which is considered to be moderate. This suggests that the two assets have some degree of positive relationship in their price movements. Moderate correlation can be acceptable for portfolio diversification, offering a balance between risk and potential returns.
Performance
LQD vs. VCSH - Performance Comparison
In the year-to-date period, LQD achieves a -2.40% return, which is significantly lower than VCSH's 0.68% return. Over the past 10 years, LQD has outperformed VCSH with an annualized return of 2.24%, while VCSH has yielded a comparatively lower 1.99% 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. VCSH - Expense Ratio Comparison
LQD has a 0.15% expense ratio, which is higher than VCSH'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. VCSH - 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 Short-Term Corporate Bond ETF (VCSH). 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. VCSH - Dividend Comparison
LQD's dividend yield for the trailing twelve months is around 4.33%, more than VCSH's 3.44% 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% |
VCSH Vanguard Short-Term Corporate Bond ETF | 3.44% | 3.09% | 2.01% | 1.81% | 2.27% | 2.87% | 2.65% | 2.26% | 2.10% | 2.08% | 2.01% | 2.05% |
Drawdowns
LQD vs. VCSH - Drawdown Comparison
The maximum LQD drawdown since its inception was -24.95%, which is greater than VCSH's maximum drawdown of -12.86%. Use the drawdown chart below to compare losses from any high point for LQD and VCSH. For additional features, visit the drawdowns tool.
Volatility
LQD vs. VCSH - Volatility Comparison
iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) has a higher volatility of 2.56% compared to Vanguard Short-Term Corporate Bond ETF (VCSH) at 0.94%. This indicates that LQD's price experiences larger fluctuations and is considered to be riskier than VCSH based on this measure. The chart below showcases a comparison of their rolling one-month volatility.