IVV vs LQD
iShares Core S&P 500 ETF vs iShares iBoxx $ Investment Grade Corporate Bond ETF
Quick Verdict
IVV has a lower expense ratio. IVV delivered stronger 1-year returns. LQD offers more diversification with 2668 holdings.
Side-by-Side Comparison
| Metric | IVV | LQD | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.14% | |
| AUM | $865.2B | $33.8B | |
| Dividend Yield | 1.09% | 4.55% | |
| Holdings | 508 | 3,134 | |
| YTD Return | +14.50% | -1.08% | |
| 1Y Return | +22.02% | +0.67% | |
| 3Y Return (annualized) | +21.80% | +4.80% | |
| 5Y Return (annualized) | +13.37% | -0.95% | |
| Volatility (annualized) | 15.1% | 7.9% | |
| Max Drawdown | -56.5% | -25.0% | |
| Fund Family | iShares by BlackRock (US) | iShares by BlackRock (US) | |
| Category | Equity | Fixed Income | |
| Inception | May 15, 2000 | Jul 22, 2002 |
IVV vs LQD Performance
iShares Core S&P 500 ETF (IVV) is a ETF from iShares by BlackRock (US) and iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) is a ETF from iShares by BlackRock (US). Over the past year IVV returned +22.02% while LQD returned +0.67%. Year to date, IVV is up 14.50% versus a loss of 1.08% for LQD.
Over three years, IVV compounded at +21.80% per year against +4.80% for LQD; over five years the annualized figures are +13.37% and -0.95% respectively. Across the full 24-year window we track, IVV has the edge at +7.07% annualized vs +4.29%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
IVV has been the more volatile fund, with annualized monthly volatility of 15.1% compared with 7.9% for LQD. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -56.5% for IVV and -25.0% for LQD. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.37. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
IVV charges 0.03% per year while LQD charges 0.14%. On a $10,000 position that is $3 vs $14 annually, a gap of $11 per year that compounds over a long holding period. On income, IVV currently yields 1.09% against 4.55% for LQD.
Holdings Overlap
IVV and LQD share 3 holdings out of 3170 unique holdings combined, representing a 0.2% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, IVV or LQD?
IVV has an expense ratio of 0.03% while LQD charges 0.14%. IVV is the cheaper option. On a $10,000 investment, that is $11 per year of difference.
Which performed better, IVV or LQD?
Over the past year IVV returned +22.02% vs +0.67% for LQD, so IVV leads on 1-year performance. Over the longest common window we track (24 years), IVV annualized +7.07% vs +4.29% for LQD. Past performance does not guarantee future results.
Which is riskier, IVV or LQD?
IVV has been the more volatile fund at 15.1% annualized versus 7.9% for LQD. Worst drawdown: IVV -56.5% vs LQD -25.0%.
Should I hold both IVV and LQD?
IVV and LQD have a monthly-return correlation of 0.37, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between IVV and LQD?
IVV and LQD share 3 common holdings with a 0.2% weight overlap. Combined, they hold 3170 unique securities.
Which pays a higher dividend, IVV or LQD?
IVV yields 1.09% while LQD yields 4.55%, so LQD currently pays the higher dividend yield.
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