LQD vs BND Stock Comparison: AI Score, Valuation, Performance and Upside
LQD and BND are both investment-grade bond ETFs but with different compositions. LQD is pure corporate credit (no Treasuries), yielding more but with credit spread risk. BND is the total bond market including Treasuries, agencies, and corporate bonds, providing true diversification and flight-to-quality benefit with lower yield. BND is broadly better for core portfolio bond allocation; LQD is appropriate as an enhanced-yield corporate credit satellite.
LQD vs BND is pure corporate credit for higher yield without Treasury safe-haven (LQD) versus total bond market diversification including Treasuries for maximum credit and duration diversification (BND) — BND's Vanguard cost advantage and Treasury diversification make it the preferred core bond holding; LQD is a credit yield satellite.
BND holds the edge across 3 of 5 key metrics in this comparison. BND has delivered stronger 1-year price return (-0.50% vs -1.87% for LQD).
- prefer corporate bond yield premium over Treasuries within investment-grade quality constraints
- value LQD as an enhanced yield satellite position within a broader bond allocation that already includes Treasuries
- want corporate credit exposure to investment-grade issuers (Apple, JPMorgan, AT&T) generating higher income than government bonds
- are comfortable with credit spread widening risk in recessions reducing LQD's safe-haven properties compared to Treasury bonds
- prefer maximum bond market diversification across Treasuries, agencies, mortgage-backed, and corporate bonds in a single low-cost ETF
- value BND's Treasury component providing flight-to-quality safe haven that corporate-only LQD cannot provide in equity bear markets
- want the most comprehensive investment-grade bond allocation at 0.03% as the core fixed income position in a portfolio
- are comfortable with lower yield than LQD in exchange for Treasury diversification providing genuine risk reduction in equity downturns
| Metric | LQD | BND |
|---|---|---|
| ETF scorei | 24.4 | 24.4 |
| Latest closei | $104.50 | $71.50 |
| 1M returni | +2.62% | +2.32% |
| 3M returni | -1.69% | -0.98% |
| 6M returni | -2.77% | -1.45% |
| 1Y returni | -1.87% | -0.50% |
The ETF score weights long-term returns and risk-adjusted performance most heavily, but still rewards low expense ratios, larger fund size, and broader diversification — so it can favor low-cost, broad, mega-cap funds over smaller thematic or actively-managed funds even when the latter have delivered stronger returns.
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | LQD | BND |
|---|---|---|
| 1Y ago | $10.21K (+2.1%) started 2025-11-04 | $10.29K (+2.9%) started 2025-11-04 |
| 5Y ago | $11.7K (+17.0%) started 2021-11-05 | $11.69K (+16.9%) started 2021-11-05 |
| 10Y ago | $18.66K (+86.6%) started 2016-11-07 | $16.29K (+62.9%) started 2016-11-07 |
Hypothetical — past performance does not guarantee future results.
| Metric | LQD | BND |
|---|---|---|
| Expense ratioi | 0.14% | 0.03% |
| Total assets (AUM)i | $32B | $395.21B |
| Dividend yieldi | 4.85% | 4.11% |
| Trailing P/Ei | N/A | N/A |
| Betai | 0.46 | 0.27 |
| 52-week change | -1.87% | -0.50% |
| Metric | LQD | BND |
|---|---|---|
| 1Y returni | -1.87% | -0.50% |
| 6M returni | -2.77% | -1.45% |
| 3M returni | -1.69% | -0.98% |
| 1M returni | +2.62% | +2.32% |
| 1Y Sharpe ratio | -1.10 | -1.23 |
| Betai | 0.46 | 0.27 |
| Dividend yieldi | 4.85% | 4.11% |
| 5Y CAGR | -1.17% | -0.40% |
Over the past year, LQD and BND have moved strongly in the same direction (correlation of 0.95), based on daily returns.
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | LQD | BND |
|---|---|---|---|
| 1Y | Growthi | -1.87% | -0.50% |
| CAGRi | -1.87% | -0.50% | |
| Volatilityi | 5.65% | 3.99% | |
| Sharpe ratioi | -1.10 | -1.23 | |
| Sortino ratioi | -1.45 | -1.62 | |
| Max drawdowni | 6.33% | 4.83% | |
| Current drawdowni | 3.88% | 2.63% | |
| Avg drawdowni | 1.90% | 1.49% | |
| Ulcer Indexi | 2.47% | 1.89% | |
| Max daily dropi | 1.23% | 0.84% | |
| Max wkly dropi | 2.55% | 1.65% | |
| 5Y | Growthi | -5.70% | -1.98% |
| CAGRi | -1.17% | -0.40% | |
| Volatilityi | 8.66% | 6.07% | |
| Sharpe ratioi | -0.61 | -0.78 | |
| Sortino ratioi | -0.84 | -1.06 | |
| Max drawdowni | 24.54% | 17.38% | |
| Current drawdowni | 5.74% | 2.63% | |
| Avg drawdowni | 10.62% | 7.31% | |
| Ulcer Indexi | 12.08% | 8.64% | |
| Max daily dropi | 2.31% | 1.62% | |
| Max wkly dropi | 4.94% | 3.50% | |
| 10Y | Growthi | +22.83% | +15.64% |
| CAGRi | +2.08% | +1.47% | |
| Volatilityi | 8.72% | 5.57% | |
| Sharpe ratioi | -0.24 | -0.52 | |
| Sortino ratioi | -0.33 | -0.70 | |
| Max drawdowni | 24.95% | 18.58% | |
| Current drawdowni | 6.25% | 3.46% | |
| Avg drawdowni | 6.55% | 4.95% | |
| Ulcer Indexi | 9.07% | 7.00% | |
| Max daily dropi | 5.00% | 5.44% | |
| Max wkly dropi | 13.25% | 8.05% |
| Category | LQD | BND |
|---|---|---|
| Fund name | iShares iBoxx $ Investment Grade Corporate Bond ETF | Vanguard Total Bond Market Index Fund ETF Shares |
| Type | ETF | ETF |
| Expense ratioi | 0.14% | 0.03% |
| Total assets (AUM)i | $32B | $395.21B |
| Dividend yieldi | 4.85% | 4.11% |
- Higher yield than Treasury-only bonds due to corporate credit spread income — LQD typically yields 1–2% more than comparable-duration Treasuries
- Investment grade quality (BBB/Baa minimum) provides credit protection — most investment grade issuers maintain credit quality even through moderate recessions
- Diversified across hundreds of corporate issuers reducing single-issuer default risk
- Most diversified US bond market exposure across Treasuries, agencies, corporate, and securitized bonds in a single ETF
- 0.03% expense ratio — one of the lowest-cost bond ETFs providing the broadest possible bond market coverage
- Treasury and agency bond component (~70% of BND) provides genuine flight-to-quality safe haven in equity market downturns
- Credit spread widening in recessions reduces LQD prices even when Treasuries rally — corporate credit does not provide the same safe-haven flight-to-quality benefit as Treasuries
- Long duration (7–9 years) makes LQD sensitive to interest rate changes — both rates and spreads must be considered
- 0.14% expense ratio vs BND's 0.03% — corporate bond ETF costs more than total bond market fund despite similar duration
- Lower yield than LQD due to Treasury bond inclusion that reduces portfolio credit spread income
- Rising interest rates reduce BND prices — intermediate duration makes BND rate-sensitive, though less than long-duration bond ETFs
- No TIPS or high-yield bonds — BND's investment-grade only constraint excludes inflation protection and enhanced income from below-investment-grade credit
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