SHY vs. LQD
SHY (iShares 1-3 Year Treasury Bond ETF) and LQD (iShares iBoxx $ Investment Grade Corporate Bond ETF) are both exchange-traded funds - SHY is a Government Bonds fund tracking the ICE US Treasury 1-3 Year Index, while LQD is a Corporate Bonds fund tracking the iBoxx $ Liquid Investment Grade Index. Both are passively managed. Over the past 10 years, SHY returned 1.63%/yr vs 2.41%/yr for LQD. A 0.58 correlation means they provide meaningful diversification when combined. Both charge a 0.15% expense ratio.
Performance
SHY vs. LQD - Performance Comparison
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Returns By Period
In the year-to-date period, SHY achieves a 0.34% return, which is significantly higher than LQD's -0.06% return. Over the past 10 years, SHY has underperformed LQD with an annualized return of 1.63%, while LQD has yielded a comparatively higher 2.41% annualized return.
SHY
- 1D
- 0.05%
- 1M
- -0.19%
- YTD
- 0.34%
- 6M
- 0.74%
- 1Y
- 3.33%
- 3Y*
- 4.04%
- 5Y*
- 1.70%
- 10Y*
- 1.63%
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%
SHY vs. LQD - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|---|
SHY iShares 1-3 Year Treasury Bond ETF | 0.34% | 4.95% | 3.92% | 4.16% | -3.88% | -0.71% | 3.03% | 3.38% | 1.46% | 0.26% |
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% |
Correlation
The correlation between SHY and LQD is 0.71, 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 | 0.71 |
Correlation (3Y) Calculated over the trailing 3-year period | 0.72 |
Correlation (5Y) Calculated over the trailing 5-year period | 0.70 |
Correlation (10Y) Calculated over the trailing 10-year period | 0.63 |
Correlation (All Time) Calculated using the full available price history since Jul 26, 2002 | 0.59 |
The correlation between SHY and LQD shifts across timeframes, from 0.58 (all time) to 0.72 (3 years), reflecting how their relationship changes across market environments.
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Return for Risk
SHY vs. LQD — Risk / Return Rank
SHY
LQD
SHY vs. LQD - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for iShares 1-3 Year Treasury Bond ETF (SHY) and iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD). 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.
| SHY | LQD | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | +1.43 | ||
| Sortino ratioReturn per unit of downside risk | +2.53 | ||
| Omega ratioGain probability vs. loss probability | 1.51 | 1.19 | +0.33 |
| Calmar ratioReturn relative to maximum drawdown | 3.76 | 1.72 | +2.04 |
| Martin ratioReturn relative to average drawdown | 15.12 | 4.88 | +10.24 |
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
| SHY | LQD | Difference | |
|---|---|---|---|
Sharpe Ratio (1Y)Calculated over the trailing 1-year period | 2.51 | 1.08 | +1.43 |
Sharpe Ratio (5Y)Calculated over the trailing 5-year period | 0.86 | -0.03 | +0.89 |
Sharpe Ratio (10Y)Calculated over the trailing 10-year period | 1.04 | 0.28 | +0.76 |
Sharpe Ratio (All Time)Calculated using the full available price history | 1.28 | 0.54 | +0.74 |
Drawdowns
SHY vs. LQD - Drawdown Comparison
The maximum SHY drawdown since its inception was -5.71%, smaller than the maximum LQD drawdown of -24.95%. Use the drawdown chart below to compare losses from any high point for SHY and LQD.
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Drawdown Indicators
| SHY | LQD | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -5.71% | -24.95% | +19.24% |
Max Drawdown (1Y)Largest decline over 1 year | -0.89% | -3.34% | +2.45% |
Max Drawdown (3Y)Largest decline over 3 years | -0.97% | -8.43% | +7.46% |
Max Drawdown (5Y)Largest decline over 5 years | -5.71% | -24.95% | +19.24% |
Max Drawdown (10Y)Largest decline over 10 years | -5.71% | -24.95% | +19.24% |
Current DrawdownCurrent decline from peak | -0.39% | -4.21% | +3.82% |
Average DrawdownAverage peak-to-trough decline | -0.52% | -3.99% | +3.47% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 0.22% | 1.18% | -0.96% |
Volatility
SHY vs. LQD - Volatility Comparison
The current volatility for iShares 1-3 Year Treasury Bond ETF (SHY) is 0.38%, while iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) has a volatility of 1.62%. This indicates that SHY experiences smaller price fluctuations and is considered to be less risky than LQD based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| SHY | LQD | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 0.38% | 1.62% | -1.24% |
Volatility (6M)Calculated over the trailing 6-month period | 0.95% | 3.94% | -2.99% |
Volatility (1Y)Calculated over the trailing 1-year period | 1.33% | 5.32% | -3.99% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 1.99% | 8.65% | -6.66% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 1.57% | 8.68% | -7.11% |
SHY vs. LQD - Expense Ratio Comparison
Both SHY and LQD have an expense ratio of 0.15%, making them cost-effective options compared to the broader market, where average expense ratios typically range from 0.3% to 0.9%.
Dividends
SHY vs. LQD - Dividend Comparison
SHY's dividend yield for the trailing twelve months is around 3.69%, less than LQD's 4.59% 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% |
SHY iShares 1-3 Year Treasury Bond ETF | 3.69% | 3.81% | 3.92% | 2.99% | 1.30% | 0.26% | 0.94% | 2.12% | 1.72% | 0.98% | 0.71% | 0.54% |
Frequently Asked Questions
SHY and LQD have a correlation of 0.71, 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 SHY (0.38%). In terms of maximum drawdown, SHY dropped -5.71% vs LQD's -24.95%.
On 10-year performance, LQD leads with 2.41% vs 1.63% for SHY. Both ETFs have the same 0.15% expense ratio. On volatility, SHY has been the lower-risk option at 0.38%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 10-year period, LQD has performed better with a 2.41% return vs 1.63%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
SHY and LQD have the same expense ratio: 0.15% per year.
LQD has the higher dividend yield at 4.59%, compared with 3.69% for SHY.
SHY is categorized as Government Bonds, while LQD is Corporate Bonds. SHY tracks ICE US Treasury 1-3 Year Index, while LQD tracks iBoxx $ Liquid Investment Grade Index.
SHY currently has the higher Sharpe Ratio (2.51 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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