VCIT vs LQD ETF Comparison: AI Score, Valuation, Performance and Upside
VCIT and LQD are both investment-grade corporate bond ETFs, but with different maturity profiles and expense ratios. VCIT's 5-10 year intermediate focus provides moderate duration risk at 0.04% expense. LQD's all-maturity approach creates higher duration at 0.14% expense — 3.5x more expensive. For individual buy-and-hold corporate bond investors, VCIT's cost advantage and targeted intermediate exposure is preferable. For institutional investors needing the IG corporate bond benchmark with maximum liquidity, LQD remains the standard.
VCIT vs LQD — Vanguard Intermediate-Term Corporate Bond ETF (intermediate 5-10 year maturity IG corporate bonds at 0.04% expense ratio for cost-conscious buy-and-hold investors) versus iShares Investment Grade Corporate Bond ETF (the most liquid all-maturity IG corporate bond benchmark at 0.14% for institutional investors needing maximum trading depth and derivatives integration).
VCIT holds the edge across 5 of 5 key metrics in this comparison. VCIT has delivered stronger 1-year price return (-0.83% vs -1.98% for LQD).
- prefer Vanguard's industry-lowest 0.04% expense ratio for investment-grade corporate bonds — saving 0.10% annually vs LQD compounds to meaningful savings for long-term bond holders
- want targeted intermediate 5-10 year duration for corporate bond allocation — managing interest rate sensitivity more precisely than all-maturity LQD
- implement duration-matching fixed income strategies using VCSH (short), VCIT (intermediate), and VCLT (long) as separately controllable duration buckets
- are comfortable with slightly less liquidity than LQD for typical individual investor portfolio sizes
- need institutional-grade liquidity for large corporate bond allocations where LQD's $30B+ AUM and the deepest IG bond ETF derivatives market enable large-scale hedging and tactical strategies
- want the recognized investment-grade corporate bond benchmark used by institutional managers for performance attribution and index fund comparison
- actively trade corporate bond exposure using LQD's options and futures for rate hedging, credit spread positioning, and fixed income ETF arbitrage strategies
- are comfortable with 0.14% expense ratio understanding it funds the liquidity premium that enables institutional trading cost savings that may offset the expense difference
| Metric | VCIT | LQD |
|---|---|---|
| ETF scorei | 35.0 | 37.0 |
| Latest closei | $79.69 | $104.70 |
| 1M returni | -1.71% | -1.34% |
| 6M returni | -0.57% | -0.58% |
| 1Y returni | -0.83% | -1.98% |
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 | VCIT | LQD |
|---|---|---|
| 1Y ago | $10.41K (+4.1%) started 2025-09-18 | $10.27K (+2.7%) started 2025-09-18 |
| 5Y ago | $12.83K (+28.3%) started 2021-09-20 | $11.75K (+17.5%) started 2021-09-20 |
| 10Y ago | $19.87K (+98.7%) started 2016-09-19 | $18.79K (+87.9%) started 2016-09-19 |
Hypothetical — past performance does not guarantee future results.
| Metric | VCIT | LQD |
|---|---|---|
| Expense ratioi | 0.03% | 0.14% |
| Total assets (AUM)i | $72.04B | $32.04B |
| Dividend yieldi | 4.89% | 4.67% |
| Trailing P/Ei | N/A | N/A |
| Betai | 0.35 | 0.45 |
| 52-week change | -0.83% | -1.98% |
| Metric | VCIT | LQD |
|---|---|---|
| 1Y returni | -0.83% | -1.98% |
| 6M returni | -0.57% | -0.58% |
| 1M returni | -1.71% | -1.34% |
| 1Y Sharpe ratio | -1.27 | -1.20 |
| Betai | 0.35 | 0.45 |
| Dividend yieldi | 4.89% | 4.67% |
| 5Y CAGR | +0.46% | -1.19% |
Over the past year, VCIT and LQD have moved strongly in the same direction (correlation of 0.97), 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 | VCIT | LQD |
|---|---|---|---|
| 1Y | Growthi | -0.83% | -1.98% |
| CAGRi | -0.83% | -1.98% | |
| Volatilityi | 4.14% | 5.29% | |
| Sharpe ratioi | -1.27 | -1.20 | |
| Sortino ratioi | -1.64 | -1.57 | |
| Max drawdowni | 3.46% | 4.08% | |
| Current drawdowni | 3.24% | 3.69% | |
| Avg drawdowni | 1.04% | 1.44% | |
| Ulcer Indexi | 1.34% | 1.74% | |
| Max daily dropi | 0.94% | 1.23% | |
| Max wkly dropi | 1.40% | 1.92% | |
| 5Y | Growthi | +2.32% | -5.82% |
| CAGRi | +0.46% | -1.19% | |
| Volatilityi | 6.65% | 8.66% | |
| Sharpe ratioi | -0.57 | -0.62 | |
| Sortino ratioi | -0.79 | -0.84 | |
| Max drawdowni | 20.25% | 24.95% | |
| Current drawdowni | 3.24% | 6.07% | |
| Avg drawdowni | 6.87% | 10.96% | |
| Ulcer Indexi | 8.84% | 12.44% | |
| Max daily dropi | 1.71% | 2.31% | |
| Max wkly dropi | 4.34% | 4.94% | |
| 10Y | Growthi | +28.73% | +22.74% |
| CAGRi | +2.56% | +2.07% | |
| Volatilityi | 6.29% | 8.69% | |
| Sharpe ratioi | -0.28 | -0.24 | |
| Sortino ratioi | -0.39 | -0.33 | |
| Max drawdowni | 20.56% | 24.95% | |
| Current drawdowni | 3.24% | 6.07% | |
| Avg drawdowni | 4.35% | 6.55% | |
| Ulcer Indexi | 6.64% | 9.05% | |
| Max daily dropi | 4.49% | 5.00% | |
| Max wkly dropi | 11.29% | 13.25% |
| Category | VCIT | LQD |
|---|---|---|
| Fund name | Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares | iShares iBoxx $ Investment Grade Corporate Bond ETF |
| Type | ETF | ETF |
| Expense ratioi | 0.03% | 0.14% |
| Total assets (AUM)i | $72.04B | $32.04B |
| Dividend yieldi | 4.89% | 4.67% |
- 0.04% expense ratio: among the cheapest intermediate corporate bond ETFs — Vanguard's cost leadership is particularly impactful for bond funds where yield margins are thin
- 5-10 year maturity focus: intermediate duration provides higher yields than short-term bonds while carrying less interest rate risk than long-term bonds — a balanced fixed income positioning
- Pure investment-grade intermediate focus: VCIT's specific maturity targeting enables investors to implement duration-specific strategies — pairing with short-term and long-term funds for barbell strategies
- Most liquid IG corporate bond ETF: LQD's $30B+ AUM and institutional recognition make it the standard investment-grade bond ETF for large institutional allocations and derivatives-based hedging
- Broader maturity range: LQD's all-maturity index creates more comprehensive corporate bond market exposure including both shorter and longer maturities vs VCIT's 5-10 year focus
- Benchmark corporate bond exposure: LQD tracks the most widely recognized investment-grade corporate bond benchmark — used by institutional managers for benchmark comparison
- Duration sensitivity: VCIT's 4-6 year effective duration creates moderate price sensitivity to interest rate changes — a 1% rate rise causes approximately 4-6% price decline
- Investment-grade credit risk: corporate bonds carry default risk beyond US Treasuries — in credit crises (2008, COVID 2020), investment-grade corporate spreads widen significantly
- Excludes long and short-term bonds: investors wanting total corporate bond market exposure need LQD or VCLT (long-term) plus VCSH (short-term) alongside VCIT
- 0.14% expense ratio vs VCIT's 0.04%: LQD costs 0.10% more per year — significant on a bond fund where yields are typically 3-5%, representing 2-3% of your gross return going to fees
- Higher duration than VCIT: LQD's longer average maturity creates more interest rate sensitivity — larger mark-to-market losses in rising rate environments than VCIT's intermediate focus
- Higher concentration in longest-maturity bonds: LQD's inclusion of long-term corporate bonds increases duration risk vs the more conservative intermediate positioning of VCIT
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