LQD vs VCIT: fees, holdings and returns
LQD holds US dollar bonds from investment grade companies across all maturities, including many long ones. VCIT holds investment grade company bonds that mature in about 5 to 10 years. LQD is more sensitive to interest rates, and VCIT charges a lower fee. Over the same dates since November 2009, LQD returned about 3.6% a year and VCIT returned about 4.0% a year.
Written by the Tactfolio research team. Fund facts checked October 16, 2026. Prices through October 20, 2026.
Key points
- VCIT costs less: 0.03% a year against 0.14%.
- LQD started trading in July 2002. VCIT started in November 2009.
- Worst drops since 2009: LQD −24.9%, VCIT −20.6%.
- Daily correlation: 0.92 (1 means they always move together).
What is the difference between LQD and VCIT?#
Both lend to large, financially sound companies. LQD includes bonds that mature 20 or 30 years from now, which lose more value when rates rise. VCIT stops at about 10 years, so it swings less with rates. In 2022, when rates rose fast, LQD fell further.
| Fact | LQD | VCIT |
|---|---|---|
| Full name | iShares iBoxx $ Investment Grade Corporate Bond ETF | Vanguard Intermediate-Term Corporate Bond ETF |
| Issuer | iShares (BlackRock) | Vanguard |
| Expense ratio | 0.14% a year | 0.03% a year |
| Started trading | July 22, 2002 | November 19, 2009 |
| Tracks | iBoxx USD Liquid Investment Grade Index | Bloomberg U.S. 5-10 Year Corporate Bond Index |
| Holdings | 3,171 holdings as of October 15, 2026 | 2,342 holdings as of September 30, 2026 |
| Type | US bonds, ETF | US bonds, ETF |
Fund facts checked on the iShares (BlackRock) LQD page and the Vanguard VCIT page.
Is LQD or VCIT cheaper?#
VCIT costs less: 0.03% a year against 0.14%. On $10,000, that is about $14 a year for LQD and $3 for VCIT. The fund takes its fee out of its own value a little each day, so you never get a bill.
LQD vs VCIT performance over the same dates#
Both funds are measured from November 2009 to October 2026, the dates both traded. LQD returned about 3.6% a year and VCIT returned about 4.0% a year. VCIT came out ahead over this period, which does not mean it will again.
| Measure | LQD | VCIT |
|---|---|---|
| $10,000 grew to | $18,206 | $19,457 |
| Total return | 82.1% | 94.6% |
| Return per year (CAGR) | 3.6% | 4.0% |
| Worst drop from a high | −24.9% | −20.6% |
| Volatility (how much it swings) | 7.6% | 5.7% |
| Last 12 months | −3.9% | −2.2% |
| Last 3 years, per year | 6.2% | 6.9% |
| Last 5 years, per year | −0.9% | 0.7% |
| Last 10 years, per year | 1.9% | 2.4% |
Prices through October 20, 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.
LQD and VCIT returns by year#
| Year | LQD | VCIT |
|---|---|---|
| 2026 (part of the year) | −3.0% | −2.4% |
| 2025 | 7.9% | 9.3% |
| 2024 | 0.9% | 3.2% |
| 2023 | 9.4% | 9.0% |
| 2022 | −17.9% | −14.0% |
| 2021 | −1.8% | −1.8% |
| 2020 | 11.0% | 9.5% |
| 2019 | 17.4% | 14.1% |
| 2018 | −3.8% | −1.7% |
| 2017 | 7.0% | 5.3% |
| 2016 | 6.2% | 5.3% |
| 2015 | −1.3% | 0.6% |
| 2014 | 8.2% | 7.7% |
| 2013 | −2.0% | −1.9% |
| 2012 | 10.2% | 10.5% |
| 2011 | 9.7% | 9.0% |
| 2010 | 9.3% | 10.0% |
| 2009 (part of the year) | −0.9% | 0.2% |
Which fell further in bad times?#
A drawdown is how far a fund falls from its last high point. LQD’s worst fall was −24.9%, from September 22, 2021 to October 20, 2022. By October 20, 2026 it had not yet climbed back to that high.
VCIT’s worst fall was −20.6%, from August 3, 2021 to October 20, 2022. It got back to that high on July 29, 2025.
Their daily moves had a correlation of 0.92. A correlation of 1 means two funds always move up and down together. Near 0 means they move on their own. So holding both adds little variety.
Why people choose LQD or VCIT#
LQD. People who want the whole investment grade corporate bond market, or trade often, tend to pick LQD.
VCIT. People who want company bonds with less interest rate risk, at a low fee, tend to pick VCIT.
Strategies that hold LQD or VCIT#
These classic strategies hold one or both at least some of the time. Each is a set of written rules you can open, test and copy.
- Bold Asset Allocation (BAA), by Wouter Keller, 2022 (holds LQD)
- Vigilant Asset Allocation (VAA), by Wouter Keller and JW Keuning, 2017 (holds LQD)
- Defensive Asset Allocation (DAA), by Wouter Keller and JW Keuning, 2018 (holds LQD)
- Protective Asset Allocation (PAA), by Wouter Keller and JW Keuning, 2016 (holds LQD)
- Composite Dual Momentum, by Gary Antonacci, 2012 (holds LQD)
- Vigilant Asset Allocation G12 (VAA-G12), by Wouter Keller and JW Keuning, 2017 (holds LQD)
- Bold Asset Allocation G4 (BAA aggressive), by Wouter Keller, 2022 (holds LQD)
- GTAA 13: Faber’s 13-asset tactical allocation, by Mebane Faber, 2013 (holds LQD)
- GTAA Aggressive 3 (Faber GTAA AGG3), by Mebane Faber, 2013 (holds LQD)
- GTAA Aggressive 6 (Faber GTAA AGG6), by Mebane Faber, 2013 (holds LQD)
- Trinity Portfolio (Meb Faber), by Mebane Faber, 2016 (holds LQD)
- Papa Bear Portfolio (Muscular Portfolios), by Brian Livingston, 2018 (holds LQD)
- Bond UI1 (Paul Novell’s unemployment bond strategy), by Paul Novell, 2019 (holds LQD)
- Paul Novell’s Tactical Bond Strategy, by Paul Novell, 2014 (holds VCIT)
Other funds like LQD and VCIT#
Each fund has more funds that hold the same kind of investments, ranked by how closely they move with it: LQD alternatives and VCIT alternatives.
Test a mix of LQD and VCIT#
Open the builder, add LQD and VCIT, and give each a weight, such as 50% and 50%. The backtest shows how the mix would have done, with its worst drop, on daily prices. You can also add a rule, for example to switch between them, and compare. Read the full pages for LQD and VCIT, or see more ETF comparisons.
The details#
Both funds use Tactfolio’s stored daily prices, adjusted for splits, with dividends reinvested. They are compared only on days both traded, starting the later fund’s first day, so neither gets a head start. Correlation uses daily returns over the same days. Read what a backtest simulates for more on these measures.
Common questions#
Why does LQD swing more than VCIT?#
LQD holds longer bonds as well as medium ones. Longer bonds lose more value when interest rates rise and gain more when they fall.
What does investment grade mean?#
It means rating agencies judge the company likely to pay back its bonds. Lower-rated bonds are called high yield or junk.
Which is cheaper, LQD or VCIT?#
VCIT costs less: 0.03% a year against 0.14%. Fees come from each issuer and were checked on October 16, 2026.
Which did better, LQD or VCIT?#
From November 2009 to October 2026, LQD returned about 3.6% a year and VCIT returned about 4.0% a year, with dividends reinvested. Their worst drops were −24.9% and −20.6%. Past returns do not tell you what comes next.