LQD vs. VTC
LQD (iShares iBoxx $ Investment Grade Corporate Bond ETF) and VTC (Vanguard Total Corporate Bond ETF) are both Corporate Bonds funds - LQD tracks the iBoxx $ Liquid Investment Grade Index while VTC tracks the Bloomberg Barclays U.S. Corporate Bond Index. Both are passively managed. Over the past 5 years, LQD returned -0.04%/yr vs 0.51%/yr for VTC. With a 0.97 correlation, they move nearly in lockstep. LQD charges 0.15%/yr vs 0.04%/yr for VTC.
Performance
LQD vs. VTC - Performance Comparison
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Returns By Period
In the year-to-date period, LQD achieves a 0.46% return, which is significantly lower than VTC's 0.60% return.
LQD
- 1D
- -0.28%
- 1M
- 0.72%
- YTD
- 0.46%
- 6M
- -0.03%
- 1Y
- 6.08%
- 3Y*
- 4.95%
- 5Y*
- -0.04%
- 10Y*
- 2.52%
VTC
- 1D
- -0.22%
- 1M
- 0.63%
- YTD
- 0.60%
- 6M
- 0.33%
- 1Y
- 5.99%
- 3Y*
- 5.22%
- 5Y*
- 0.51%
- 10Y*
- —
LQD vs. VTC - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|---|
LQD iShares iBoxx $ Investment Grade Corporate Bond ETF | 0.46% | 7.90% | 0.86% | 9.40% | -17.92% | -1.84% | 10.97% | 17.37% | -3.79% | 1.30% |
VTC Vanguard Total Corporate Bond ETF | 0.60% | 7.58% | 2.15% | 8.58% | -15.68% | -1.41% | 9.30% | 14.60% | -2.55% | 0.84% |
Correlation
The correlation between LQD and VTC is 0.99 - these two move nearly in lockstep. At this level, holding both provides almost no diversification benefit. If you already own one, adding the other does little to reduce portfolio risk.
| Correlation | |
|---|---|
Correlation (1Y) Calculated over the trailing 1-year period | 0.99 |
Correlation (3Y) Calculated over the trailing 3-year period | 0.99 |
Correlation (5Y) Calculated over the trailing 5-year period | 0.99 |
Correlation (All Time) Calculated using the full available price history since Nov 10, 2017 | 0.97 |
The correlation between LQD and VTC has been stable across timeframes, ranging from 0.97 to 0.99 - a consistent structural relationship.
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Return for Risk
LQD vs. VTC — Risk / Return Rank
LQD
VTC
LQD vs. VTC - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) and Vanguard Total Corporate Bond ETF (VTC). 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 | VTC | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | -0.24 | ||
| Sortino ratioReturn per unit of downside risk | -0.35 | ||
| Omega ratioGain probability vs. loss probability | 1.20 | 1.24 | -0.04 |
| Calmar ratioReturn relative to maximum drawdown | 1.83 | 2.09 | -0.26 |
| Martin ratioReturn relative to average drawdown | 5.23 | 6.63 | -1.40 |
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 | VTC | Difference | |
|---|---|---|---|
Sharpe Ratio (1Y)Calculated over the trailing 1-year period | 1.14 | 1.38 | -0.24 |
Sharpe Ratio (5Y)Calculated over the trailing 5-year period | -0.01 | 0.07 | -0.08 |
Sharpe Ratio (10Y)Calculated over the trailing 10-year period | 0.29 | — | — |
Sharpe Ratio (All Time)Calculated using the full available price history | 0.54 | 0.32 | +0.22 |
Drawdowns
LQD vs. VTC - Drawdown Comparison
The maximum LQD drawdown since its inception was -24.95%, which is greater than VTC's maximum drawdown of -22.05%. Use the drawdown chart below to compare losses from any high point for LQD and VTC.
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Drawdown Indicators
| LQD | VTC | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -24.95% | -22.05% | -2.90% |
Max Drawdown (1Y)Largest decline over 1 year | -3.34% | -2.88% | -0.46% |
Max Drawdown (3Y)Largest decline over 3 years | -8.43% | -6.46% | -1.97% |
Max Drawdown (5Y)Largest decline over 5 years | -24.95% | -22.05% | -2.90% |
Max Drawdown (10Y)Largest decline over 10 years | -24.95% | — | — |
Current DrawdownCurrent decline from peak | -3.72% | -0.99% | -2.73% |
Average DrawdownAverage peak-to-trough decline | -3.99% | -5.84% | +1.85% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 1.17% | 0.90% | +0.27% |
Volatility
LQD vs. VTC - Volatility Comparison
iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) has a higher volatility of 1.65% compared to Vanguard Total Corporate Bond ETF (VTC) at 1.43%. This indicates that LQD's price experiences larger fluctuations and is considered to be riskier than VTC based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| LQD | VTC | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 1.65% | 1.43% | +0.22% |
Volatility (6M)Calculated over the trailing 6-month period | 3.90% | 3.22% | +0.68% |
Volatility (1Y)Calculated over the trailing 1-year period | 5.36% | 4.37% | +0.99% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 8.65% | 7.08% | +1.57% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 8.68% | 7.68% | +1.00% |
LQD vs. VTC - Expense Ratio Comparison
LQD has a 0.15% expense ratio, which is higher than VTC'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%.
Dividends
LQD vs. VTC - Dividend Comparison
LQD's dividend yield for the trailing twelve months is around 4.57%, less than VTC's 4.93% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
LQD iShares iBoxx $ Investment Grade Corporate Bond ETF | 4.57% | 4.48% | 4.45% | 3.99% | 3.30% | 2.30% | 2.66% | 3.29% | 3.67% | 3.10% | 3.34% | 3.47% |
VTC Vanguard Total Corporate Bond ETF | 4.93% | 4.76% | 4.50% | 3.80% | 3.13% | 2.36% | 2.69% | 3.34% | 3.53% | 0.55% | 0.00% | 0.00% |
Frequently Asked Questions
With a correlation of 0.99, LQD and VTC move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.
LQD has higher volatility (1.65%) compared to VTC (1.43%). In terms of maximum drawdown, LQD dropped -24.95% vs VTC's -22.05%.
On 5-year performance, VTC leads with 0.51% vs -0.04% for LQD. On fees, VTC is cheaper at 0.04% per year. On volatility, VTC has been the lower-risk option at 1.43%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 5-year period, VTC has performed better with a 0.51% return vs -0.04%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
VTC is cheaper with a 0.04% expense ratio, compared with 0.15% for LQD.
VTC has the higher dividend yield at 4.93%, compared with 4.57% for LQD.
LQD tracks iBoxx $ Liquid Investment Grade Index, while VTC tracks Bloomberg Barclays U.S. Corporate Bond Index. They also come from different issuers: iShares and Vanguard. Their fees differ too: 0.15% for LQD and 0.04% for VTC.
VTC currently has the higher Sharpe Ratio (1.38 vs 1.14), 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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