LQD alternatives and similar ETFs

LQD alternatives at a glance#

Each fund below can stand in for LQD, closest first. “Same kind” funds hold the same kind of bonds through a different index. “Related” funds make a different bet that often moves the same way.

Fees come from each fund company, checked on the dates shown on each fund’s page.

How LQD and its alternatives did over the same dates#

Each row measures the alternative and LQD on the days both traded, so neither gets a head start. Correlation shows how closely their daily moves matched over about the last five years. A value of 1 means they always moved together.

Prices through October 16, 2026. Figures use daily closing prices adjusted for splits, with dividends reinvested. They do not include taxes or the cost of buying and selling. Past results do not tell you what will happen next.

Each LQD alternative, compared#

VCIT: Vanguard Intermediate-Term Corporate Bond ETF#

VCIT also holds bonds from large US companies with strong credit ratings. It tracks the Bloomberg U.S. 5-10 Year Corporate Bond Index, while LQD tracks the iBoxx USD Liquid Investment Grade Index.

It charges 0.03% a year, about $3 on $10,000, against $14 for LQD. It held 2,342 holdings, against 3,171 for LQD.

From November 2009 to October 2026, VCIT returned about 4.0% a year and LQD returned about 3.6% a year. Over about the last five years they moved almost exactly together (correlation 0.97).

Read the VCIT fund page for its returns by year and worst drop.

IUSB: iShares Core Universal USD Bond ETF#

IUSB is a looser match. It holds a broad mix of US bonds: government, company and mortgage bonds, while LQD holds bonds from large US companies with strong credit ratings.

It charges 0.06% a year, about $6 on $10,000, against $14 for LQD. It held 18,251 holdings, against 3,171 for LQD.

From June 2014 to October 2026, IUSB returned about 2.0% a year and LQD returned about 2.5% a year. Over about the last five years they moved almost exactly together (correlation 0.95).

Read the IUSB fund page for its returns by year and worst drop.

AGG: iShares Core U.S. Aggregate Bond ETF#

AGG is a looser match. It holds a broad mix of US bonds: government, company and mortgage bonds, while LQD holds bonds from large US companies with strong credit ratings.

It charges 0.03% a year, about $3 on $10,000, against $14 for LQD. It held 13,416 holdings, against 3,171 for LQD.

From September 2003 to October 2026, AGG returned about 3.0% a year and LQD returned about 3.9% a year. Over about the last five years they moved together on most days (correlation 0.94).

Read the AGG fund page for its returns by year and worst drop.

BND: Vanguard Total Bond Market ETF#

BND is a looser match. It holds a broad mix of US bonds: government, company and mortgage bonds, while LQD holds bonds from large US companies with strong credit ratings.

It charges 0.03% a year, about $3 on $10,000, against $14 for LQD. It held 11,434 holdings, against 3,171 for LQD.

From April 2007 to October 2026, BND returned about 2.9% a year and LQD returned about 3.9% a year. Over about the last five years they moved together on most days (correlation 0.94).

Read the BND fund page for its returns by year and worst drop.

SCHZ: Schwab U.S. Aggregate Bond ETF#

SCHZ is a looser match. It holds a broad mix of US bonds: government, company and mortgage bonds, while LQD holds bonds from large US companies with strong credit ratings.

It charges 0.03% a year, about $3 on $10,000, against $14 for LQD. It held 12,355 holdings, against 3,171 for LQD.

From July 2011 to October 2026, SCHZ returned about 1.9% a year and LQD returned about 3.1% a year. Over about the last five years they moved together on most days (correlation 0.94).

Read the SCHZ fund page for its returns by year and worst drop.

HYG: iShares iBoxx $ High Yield Corporate Bond ETF#

HYG is a looser match. It holds bonds from US companies with weaker credit, which pay more interest and carry more risk, while LQD holds bonds from large US companies with strong credit ratings.

It charges 0.49% a year, about $49 on $10,000, against $14 for LQD. It held 1,334 holdings, against 3,171 for LQD.

From April 2007 to October 2026, HYG returned about 4.8% a year and LQD returned about 3.9% a year. Over about the last five years they often moved together, but not always (correlation 0.71).

Read the HYG fund page for its returns by year and worst drop.

USHY: iShares Broad USD High Yield Corporate Bond ETF#

USHY is a looser match. It holds bonds from US companies with weaker credit, which pay more interest and carry more risk, while LQD holds bonds from large US companies with strong credit ratings.

It charges 0.08% a year, about $8 on $10,000, against $14 for LQD. It held 1,902 holdings, against 3,171 for LQD.

From October 2017 to October 2026, USHY returned about 4.4% a year and LQD returned about 1.9% a year. Over about the last five years they often moved together, but not always (correlation 0.69).

Read the USHY fund page for its returns by year and worst drop.

JNK: State Street SPDR Bloomberg High Yield Bond ETF#

JNK is a looser match. It holds bonds from US companies with weaker credit, which pay more interest and carry more risk, while LQD holds bonds from large US companies with strong credit ratings.

It charges 0.4% a year, about $40 on $10,000, against $14 for LQD. It held 1,161 holdings, against 3,171 for LQD.

From December 2007 to October 2026, JNK returned about 4.8% a year and LQD returned about 3.8% a year. Over about the last five years they often moved together, but not always (correlation 0.69).

Read the JNK fund page for its returns by year and worst drop.

LQD versions from other fund companies#

Some people keep all their funds with one company. Here is the closest fund to LQD from each other company on this page:

• Vanguard: VCIT, Vanguard Intermediate-Term Corporate Bond ETF (same kind of fund, 0.03% a year)
• Schwab: SCHZ, Schwab U.S. Aggregate Bond ETF (related fund, 0.03% a year)
• SPDR (State Street): JNK, State Street SPDR Bloomberg High Yield Bond ETF (related fund, 0.4% a year)

Most brokers let you buy any ETF, whoever runs it. Mutual fund versions, such as a fund company’s index mutual fund, are not listed here.

How to choose between LQD and its alternatives#

• What it tracks. A fund on the same index holds the same bonds. A different index can mean different weights, more or fewer holdings, or a different mix.
• The fee. The difference is often small. On $10,000, LQD costs about $14 a year. VCIT costs about $3.
• History. An older fund has been through more bad markets, so you can see how far it fell.
• What you already own. Two funds that move together add little variety. A fund with a low correlation behaves more on its own.

Swapping LQD to harvest a tax loss#

Some investors sell a fund at a loss to lower their taxes, then buy a similar fund so they stay invested. This is called tax-loss harvesting.

The IRS wash sale rule blocks the loss if you buy a “substantially identical” security within 30 days before or after the sale. The IRS has not said exactly when two funds count. Funds on the same index are more likely to. Funds on a different index, such as VCIT, IUSB or AGG, are less likely to.

Ask a tax professional before you rely on this. Read the IRS rules in Publication 550.

Test LQD and its alternatives in a backtest#

Tactfolio is a platform where you build rules-based investing strategies, backtest them on decades of real prices, share them, and run them automatically in your own Alpaca account. Open the builder, add LQD and VCIT, and see how each would have done on the same dates, or how a mix of both would have done.

The details#

Alternatives are picked from facts, not from returns. First come funds that track the same index as LQD. Then come funds that hold the same kind of bonds through another index. Last come funds from a close category that make a different bet. Leveraged funds are only listed as alternatives to other leveraged funds.

Within each group, the funds whose daily returns moved most like LQD over about the last five years come first. Returns and worst drops use Tactfolio’s stored daily prices, adjusted for splits, with dividends reinvested. Each alternative is measured with LQD only on days both traded. Read what a backtest simulates for more on these measures.