LQD vs VXUS
LQD vs VXUS
iShares iBoxx $ Investment Grade Corporate Bond ETF vs Vanguard Total International Stock ETF
Quick Verdict
VXUS has a lower expense ratio. VXUS delivered stronger 1-year returns. VXUS offers more diversification with 7861 holdings.
Side-by-Side Comparison
| Metric | LQD | VXUS | Winner |
|---|---|---|---|
| Expense Ratio | 0.14% | 0.05% | |
| AUM | $33.8B | $156.5B | |
| Dividend Yield | 4.55% | 2.60% | |
| Holdings | 3,134 | 8,747 | |
| YTD Return | -1.08% | +14.57% | |
| 1Y Return | +1.12% | +27.82% | |
| 3Y Return (annualized) | +4.46% | +19.27% | |
| 5Y Return (annualized) | -0.80% | +9.28% | |
| Volatility (annualized) | 7.9% | 15.1% | |
| Max Drawdown | -25.0% | -39.9% | |
| Fund Family | iShares by BlackRock (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Jul 22, 2002 | Jan 26, 2011 |
LQD vs VXUS Performance
iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) is a ETF from iShares by BlackRock (US) and Vanguard Total International Stock ETF (VXUS) is a ETF from Vanguard (US). Over the past year LQD returned +1.12% while VXUS returned +27.82%. Year to date, LQD is down 1.08% versus a gain of 14.57% for VXUS.
Over three years, LQD compounded at +4.46% per year against +19.27% for VXUS; over five years the annualized figures are -0.80% and +9.28% respectively. Across the full 16-year window we track, VXUS has the edge at +4.86% annualized vs +4.29%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VXUS 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 -25.0% for LQD and -39.9% for VXUS. 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 0.52. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
LQD charges 0.14% per year while VXUS charges 0.05%. On a $10,000 position that is $14 vs $5 annually, a gap of $9 per year that compounds over a long holding period. On income, LQD currently yields 4.55% against 2.60% for VXUS.
Holdings Overlap
LQD and VXUS share 1 holdings out of 10528 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in LQD | Weight in VXUS | Difference |
|---|---|---|---|
| LOGG3:BV | 0.03% | 0.00% | 0.03% |
Frequently Asked Questions
Which is cheaper, LQD or VXUS?
LQD has an expense ratio of 0.14% while VXUS charges 0.05%. VXUS is the cheaper option. On a $10,000 investment, that is $9 per year of difference.
Which performed better, LQD or VXUS?
Over the past year LQD returned +1.12% vs +27.82% for VXUS, so VXUS leads on 1-year performance. Over the longest common window we track (16 years), LQD annualized +4.29% vs +4.86% for VXUS. Past performance does not guarantee future results.
Which is riskier, LQD or VXUS?
VXUS has been the more volatile fund at 15.1% annualized versus 7.9% for LQD. Worst drawdown: LQD -25.0% vs VXUS -39.9%.
Should I hold both LQD and VXUS?
LQD and VXUS have a monthly-return correlation of 0.52, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between LQD and VXUS?
LQD and VXUS share 1 common holdings with a 0.0% weight overlap. Combined, they hold 10528 unique securities.
Which pays a higher dividend, LQD or VXUS?
LQD yields 4.55% while VXUS yields 2.60%, so LQD currently pays the higher dividend yield.
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