LQD vs QQQ
iShares iBoxx $ Investment Grade Corporate Bond ETF vs Invesco QQQ Trust, Series 1
Quick Verdict
LQD has a lower expense ratio. QQQ delivered stronger 1-year returns. LQD offers more diversification with 3,134 holdings.
Side-by-Side Comparison
| Metric | LQD | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.14% | 0.18% | |
| AUM | $33.3B | $496.3B | |
| Dividend Yield | 4.65% | 0.44% | |
| Holdings | 3,134 | 108 | |
| YTD Return | -1.24% | +16.64% | |
| 1Y Return | +1.35% | +27.27% | |
| 3Y Return (annualized) | +5.15% | +25.96% | |
| 5Y Return (annualized) | -1.02% | +14.54% | |
| Volatility (annualized) | 7.9% | 30.6% | |
| Max Drawdown | -25.0% | -83.0% | |
| Fund Family | iShares by BlackRock (US) | Invesco (US) | |
| Category | Fixed Income | Equity | |
| Inception | Jul 22, 2002 | Mar 10, 1999 |
LQD vs QQQ Performance
iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) is a ETF from iShares by BlackRock (US) and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year LQD returned +1.35% while QQQ returned +27.27%. Year to date, LQD is down 1.24% versus a gain of 16.64% for QQQ.
Over three years, LQD compounded at +5.15% per year against +25.96% for QQQ; over five years the annualized figures are -1.02% and +14.54% respectively. Across the full 24-year window we track, QQQ has the edge at +13.03% annualized vs +4.28%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
QQQ has been the more volatile fund, with annualized monthly volatility of 30.6% 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 -25.0% for LQD and -83.0% for QQQ. 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 0.32. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
LQD charges 0.14% per year while QQQ charges 0.18%. On a $10,000 position that is $14 vs $18 annually, a gap of $4 per year that compounds over a long holding period. On income, LQD currently yields 4.65% against 0.44% for QQQ.
Holdings Overlap
LQD and QQQ share 1 holdings out of 2769 unique holdings combined, representing a 0.2% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in LQD | Weight in QQQ | Difference |
|---|---|---|---|
| TMUS | 0.17% | 0.82% | 0.65% |
Frequently Asked Questions
Which is cheaper, LQD or QQQ?
LQD has an expense ratio of 0.14% while QQQ charges 0.18%. LQD is the cheaper option. On a $10,000 investment, that is $4 per year of difference.
Which performed better, LQD or QQQ?
Over the past year LQD returned +1.35% vs +27.27% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (24 years), LQD annualized +4.28% vs +13.03% for QQQ. Past performance does not guarantee future results.
Which is riskier, LQD or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 7.9% for LQD. Worst drawdown: LQD -25.0% vs QQQ -83.0%.
Should I hold both LQD and QQQ?
LQD and QQQ have a monthly-return correlation of 0.32, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between LQD and QQQ?
LQD and QQQ share 1 common holdings with a 0.2% weight overlap. Combined, they hold 2769 unique securities.
Which pays a higher dividend, LQD or QQQ?
LQD yields 4.65% while QQQ yields 0.44%, so LQD currently pays the higher dividend yield.
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