LQD vs SPY
iShares iBoxx $ Investment Grade Corporate Bond ETF vs State Street SPDR S&P 500 ETF Trust
Quick Verdict
SPY has a lower expense ratio. SPY delivered stronger 1-year returns. LQD offers more diversification with 3,134 holdings.
Side-by-Side Comparison
| Metric | LQD | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.14% | 0.09% | |
| AUM | $33.3B | $821.1B | |
| Dividend Yield | 4.65% | 1.01% | |
| Holdings | 3,134 | 505 | |
| YTD Return | -1.11% | +12.22% | |
| 1Y Return | +1.09% | +20.83% | |
| 3Y Return (annualized) | +5.31% | +21.70% | |
| 5Y Return (annualized) | -0.98% | +12.98% | |
| Volatility (annualized) | 7.9% | 15.3% | |
| Max Drawdown | -25.0% | -56.5% | |
| Fund Family | iShares by BlackRock (US) | State Street Investment Management | |
| Category | Fixed Income | Equity | |
| Inception | Jul 22, 2002 | Jan 22, 1993 |
LQD vs SPY Performance
iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) is a ETF from iShares by BlackRock (US) and State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management. Over the past year LQD returned +1.09% while SPY returned +20.83%. Year to date, LQD is down 1.11% versus a gain of 12.22% for SPY.
Over three years, LQD compounded at +5.31% per year against +21.70% for SPY; over five years the annualized figures are -0.98% and +12.98% respectively. Across the full 24-year window we track, SPY has the edge at +8.79% annualized vs +4.29%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
SPY has been the more volatile fund, with annualized monthly volatility of 15.3% 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 -56.5% for SPY. 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
LQD charges 0.14% per year while SPY charges 0.09%. On a $10,000 position that is $14 vs $9 annually, a gap of $5 per year that compounds over a long holding period. On income, LQD currently yields 4.65% against 1.01% for SPY.
Holdings Overlap
LQD and SPY share 3 holdings out of 3169 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, LQD or SPY?
LQD has an expense ratio of 0.14% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $5 per year of difference.
Which performed better, LQD or SPY?
Over the past year LQD returned +1.09% vs +20.83% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (24 years), LQD annualized +4.29% vs +8.79% for SPY. Past performance does not guarantee future results.
Which is riskier, LQD or SPY?
SPY has been the more volatile fund at 15.3% annualized versus 7.9% for LQD. Worst drawdown: LQD -25.0% vs SPY -56.5%.
Should I hold both LQD and SPY?
LQD and SPY 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 LQD and SPY?
LQD and SPY share 3 common holdings with a 0.2% weight overlap. Combined, they hold 3169 unique securities.
Which pays a higher dividend, LQD or SPY?
LQD yields 4.65% while SPY yields 1.01%, so LQD currently pays the higher dividend yield.
Popular ETF Comparisons
Get Full ETF Analytics
Access complete holdings data, overlap analysis, screener tools, and more with FundXLS.