VCLT vs. LQD

Last updated Jun 3, 2026

VCLT (Vanguard Long-Term Corporate Bond ETF) and LQD (iShares iBoxx $ Investment Grade Corporate Bond ETF) are both Corporate Bonds funds - VCLT tracks the Barclays U.S. 10+ Year Corporate Index while LQD tracks the iBoxx $ Liquid Investment Grade Index. Both are passively managed. Over the past 10 years, VCLT returned 2.35%/yr vs 2.55%/yr for LQD. Their correlation of 0.89 suggests significant overlap in exposure. VCLT charges 0.04%/yr vs 0.15%/yr for LQD.

Performance

VCLT vs. LQD - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Long-Term Corporate Bond ETF (VCLT) and iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VCLT achieves a 1.34% return, which is significantly higher than LQD's 0.74% return. Over the past 10 years, VCLT has underperformed LQD with an annualized return of 2.35%, while LQD has yielded a comparatively higher 2.55% annualized return.

VCLT

• 1D: 0.04%
• 1M: 1.34%
• YTD: 1.34%
• 6M: 0.62%
• 1Y: 8.27%
• 3Y*: 4.46%
• 5Y*: -1.50%
• 10Y*: 2.35%

LQD

• 1D: -0.01%
• 1M: 0.67%
• YTD: 0.74%
• 6M: 0.47%
• 1Y: 6.42%
• 3Y*: 5.05%
• 5Y*: 0.15%
• 10Y*: 2.55%

*Multi-year figures are annualized to reflect compound growth (CAGR)

VCLT vs. LQD - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VCLT Vanguard Long-Term Corporate Bond ETF	1.34%	7.18%	-1.90%	11.17%	-25.50%	-1.73%	13.27%	23.89%	-7.04%	11.70%
LQD iShares iBoxx $ Investment Grade Corporate Bond ETF	0.74%	7.90%	0.86%	9.40%	-17.92%	-1.84%	10.97%	17.37%	-3.79%	7.06%

Correlation

The correlation between VCLT and LQD is 0.98 - 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	0.98
Correlation (3Y) Calculated over the trailing 3-year period	0.99
Correlation (5Y) Calculated over the trailing 5-year period	0.98
Correlation (10Y) Calculated over the trailing 10-year period	0.96
Correlation (All Time) Calculated using the full available price history since Nov 24, 2009	0.89

The correlation between VCLT and LQD has been stable across timeframes, ranging from 0.89 to 0.99 - a consistent structural relationship.

Return for Risk

VCLT vs. LQD — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

VCLT

VCLT Risk / Return Rank: 28
VCLT Sharpe Ratio Rank: 29
VCLT Sortino Ratio Rank: 29
VCLT Omega Ratio Rank: 27
VCLT Calmar Ratio Rank: 31
VCLT Martin Ratio Rank: 25

LQD

LQD Risk / Return Rank: 33
LQD Sharpe Ratio Rank: 33
LQD Sortino Ratio Rank: 33
LQD Omega Ratio Rank: 31
LQD Calmar Ratio Rank: 37
LQD Martin Ratio Rank: 33

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

VCLT vs. LQD - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Long-Term Corporate Bond ETF (VCLT) 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.

	VCLT	LQD	Difference
Sharpe ratio Return per unit of total volatility	1.05	1.20	-0.16
Sortino ratio Return per unit of downside risk	1.53	1.77	-0.24
Omega ratio Gain probability vs. loss probability	1.18	1.21	-0.03
Calmar ratio Return relative to maximum drawdown	1.47	1.83	-0.36
Martin ratio Return relative to average drawdown	3.63	5.26	-1.63
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VCLT vs. LQD - Sharpe Ratio Comparison

The current VCLT Sharpe Ratio is 1.05, which is comparable to the LQD Sharpe Ratio of 1.20. The chart below compares the historical Sharpe Ratios of VCLT and LQD, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	VCLT	LQD	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	1.05	1.20	-0.16
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	-0.12	0.02	-0.14
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.18	0.29	-0.11
Sharpe Ratio (All Time) Calculated using the full available price history	0.40	0.54	-0.14

Drawdowns

VCLT vs. LQD - Drawdown Comparison

The maximum VCLT drawdown since its inception was -34.31%, which is greater than LQD's maximum drawdown of -24.95%. Use the drawdown chart below to compare losses from any high point for VCLT and LQD.

Drawdown Indicators

	VCLT	LQD	Difference
Max Drawdown Largest peak-to-trough decline	-34.31%	-24.95%	-9.36%
Max Drawdown (1Y) Largest decline over 1 year	-5.25%	-3.34%	-1.91%
Max Drawdown (3Y) Largest decline over 3 years	-13.03%	-8.43%	-4.60%
Max Drawdown (5Y) Largest decline over 5 years	-34.31%	-24.95%	-9.36%
Max Drawdown (10Y) Largest decline over 10 years	-34.31%	-24.95%	-9.36%
Current Drawdown Current decline from peak	-14.06%	-3.45%	-10.61%
Average Drawdown Average peak-to-trough decline	-8.16%	-3.99%	-4.17%
Ulcer Index Depth and duration of drawdowns from previous peaks	2.12%	1.16%	+0.96%

Volatility

VCLT vs. LQD - Volatility Comparison

Vanguard Long-Term Corporate Bond ETF (VCLT) has a higher volatility of 2.34% compared to iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) at 1.66%. This indicates that VCLT's price experiences larger fluctuations and is considered to be riskier than LQD based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VCLT	LQD	Difference
Volatility (1M) Calculated over the trailing 1-month period	2.34%	1.66%	+0.68%
Volatility (6M) Calculated over the trailing 6-month period	5.81%	3.92%	+1.89%
Volatility (1Y) Calculated over the trailing 1-year period	7.93%	5.36%	+2.57%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	12.78%	8.65%	+4.13%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	12.84%	8.68%	+4.16%

VCLT vs. LQD - Expense Ratio Comparison

VCLT has a 0.04% expense ratio, which is lower than LQD's 0.15% 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

VCLT vs. LQD - Dividend Comparison

VCLT's dividend yield for the trailing twelve months is around 5.53%, more than LQD's 4.56% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
LQD iShares iBoxx $ Investment Grade Corporate Bond ETF	4.56%	4.48%	4.45%	3.99%	3.30%	2.30%	2.66%	3.29%	3.67%	3.10%	3.34%	3.47%
VCLT Vanguard Long-Term Corporate Bond ETF	5.53%	5.51%	5.19%	4.67%	4.44%	3.07%	3.16%	3.81%	4.55%	4.01%	4.33%	4.68%

Frequently Asked Questions

Can I hold both VCLT and LQD in my portfolio?

With a correlation of 0.98, VCLT and LQD 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.

Which is riskier, VCLT or LQD?

VCLT has higher volatility (2.34%) compared to LQD (1.66%). In terms of maximum drawdown, VCLT dropped -34.31% vs LQD's -24.95%.

Which ETF is better, VCLT or LQD?

On 10-year performance, LQD leads with 2.55% vs 2.35% for VCLT. On fees, VCLT is cheaper at 0.04% per year. On volatility, LQD has been the lower-risk option at 1.66%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VCLT or LQD?

Over the 10-year period, LQD has performed better with a 2.55% return vs 2.35%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VCLT or LQD?

VCLT is cheaper with a 0.04% expense ratio, compared with 0.15% for LQD.

Which ETF pays a higher dividend yield, VCLT or LQD?

VCLT has the higher dividend yield at 5.53%, compared with 4.56% for LQD.

What is the main difference between VCLT and LQD?

VCLT tracks Barclays U.S. 10+ Year Corporate Index, while LQD tracks iBoxx $ Liquid Investment Grade Index. They also come from different issuers: Vanguard and iShares. Their fees differ too: 0.04% for VCLT and 0.15% for LQD.

Which has better risk-adjusted returns?

LQD currently has the higher Sharpe Ratio (1.20 vs 1.05), 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.