HYG vs LQD: Head-to-Head Comparison
HYG vs LQD: iShares iBoxx $ High Yield Corporate Bond ETF has an expense ratio of 0.49% while iShares iBoxx $ Investment Grade Corporate Bond ETF charges 0.14%. HYG holds 1,200 securities vs LQD's 2,700. 5-year returns: 3.20% vs 1.20%.
Last updated: April 2026
Bond
Quick Verdict
Both ETFs score equally well for beginners (10/10). Your choice depends on your specific investment goals.
Side-by-Side Comparison
| Metric | HYG | LQD |
|---|---|---|
| Expense Ratio | 0.49% | 0.14% |
| AUM | $17.0B | $35.0B |
| Dividend Yield | 5.50% | 4.50% |
| Holdings | 1,200 | 2,700 |
| 1-Year Return | 6.80% | 4.20% |
| 5-Year Return (Ann.) | 3.20% | 1.20% |
| 10-Year Return (Ann.) | 3.80% | 2.50% |
| Beta | 0.28 | 0.15 |
| P/E Ratio | N/A | N/A |
HYG 5-year annualized return is 3.20% compared to LQD's 1.20%. Over 10 years, HYG returned 3.80% vs LQD's 2.50%.
View data table
| Period | HYG Return | LQD Return |
|---|---|---|
| YTD | 1.20% | 0.60% |
| 1 Year | 6.80% | 4.20% |
| 3 Year | 2.20% | -0.50% |
| 5 Year | 3.20% | 1.20% |
| 10 Year | 3.80% | 2.50% |
Key Differences Between HYG and LQD
HYG (iShares iBoxx $ High Yield Corporate Bond ETF) is a high yield bond fund managed by BlackRock. HYG invests in U.S. dollar-denominated high yield corporate bonds, often called junk bonds, which are issued by companies with lower credit ratings. These bonds pay higher interest rates to compensate investors for the greater risk of default. Beginners should know that HYG behaves more like stocks than traditional bonds, offering higher income but with more volatility during economic downturns.
LQD (iShares iBoxx $ Investment Grade Corporate Bond ETF) is a investment grade corporate bond fund managed by BlackRock. LQD invests in investment-grade corporate bonds issued by high-quality U.S. companies with strong credit ratings. It offers a yield premium over Treasury bonds because corporate bonds carry slightly more risk. Beginners use LQD to earn more income than government bonds while still maintaining relatively high credit quality and lower volatility than high-yield or stock investments.
The most notable differences are in fees (0.49% vs 0.14%), number of holdings (1,200 vs 2,700), and 5-year returns (3.20% vs 1.20%).
HYG vs LQD multi-factor comparison: HYG has a 0.49% expense ratio, 3.20% 5-year return, 1,200 holdings, 0.28 beta, and 5.50% yield. LQD has 0.14% expense ratio, 1.20% 5-year return, 2,700 holdings, 0.15 beta, and 4.50% yield.
View data table
| Metric | HYG | LQD |
|---|---|---|
| Expense Ratio | 0.49% | 0.14% |
| 5-Year Return | 3.20% | 1.20% |
| Holdings | 1,200 | 2,700 |
| Beta | 0.28 | 0.15 |
| Dividend Yield | 5.50% | 4.50% |
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Holdings Overlap Analysis
100%
Holdings Overlap
HYG and LQD share 100% of their top holdings. This means they are very similar funds — owning both would result in significant duplication in your portfolio. For most beginners, choosing one is sufficient.
HYG and LQD share 100% of their top holdings (high overlap). HYG has 1,200 total holdings and LQD has 2,700. Common holdings include N/A, N/A, N/A.
View data table
| Metric | HYG | LQD |
|---|---|---|
| Overlap | 100% | 100% |
| Unique Holdings | 0% | 0% |
| Total Holdings | 1,200 | 2,700 |
Cost Comparison Over Time
If you invest $10,000 and hold for 20 years (assuming 8% annual returns):
HYG
Fee cost: $4,052
LQD
Fee cost: $1,194
Over 20 years, the fee difference amounts to $2,858 on a $10,000 investment. LQD saves you more in fees over time.
On a $10,000 investment over 20 years at 8% return, HYG (0.49% fee) grows to $42,558 while LQD (0.14% fee) grows to $45,416. The fee difference costs $2,858.
View data table
| Year | HYG Value | LQD Value |
|---|---|---|
| 0 | $10,000 | $10,000 |
| 5 | $14,363 | $14,598 |
| 10 | $20,629 | $21,311 |
| 15 | $29,630 | $31,110 |
| 20 | $42,558 | $45,416 |
Which One Should a Beginner Choose?
Choose HYG if: You want income seekers who want higher yields and are comfortable with credit risk, investors looking to add a fixed-income component that offers equity-like returns, those who understand that high-yield bonds trade more like stocks than traditional bonds. It's managed by BlackRock with an expense ratio of 0.49%.
Choose LQD if: You want income investors who want a step up in yield from treasuries without taking on junk bond risk, retirees building a diversified fixed-income portfolio with investment-grade quality, conservative investors seeking a middle ground between government bonds and high-yield bonds. It's managed by BlackRock with an expense ratio of 0.14%.
Can You Own Both HYG and LQD?
With 100% holdings overlap, owning both means you're essentially doubling down on the same stocks. For beginners, we recommend picking one to keep things simple. If you want more diversification, consider pairing your choice with an international ETF like VXUS or a bond ETF like BND instead.
Frequently Asked Questions
Should I buy HYG or LQD?▾
Both ETFs score equally well for beginners (10/10). Your choice depends on your specific investment goals. However, both are solid options. HYG is best for investors who want income seekers who want higher yields and are comfortable with credit risk, while LQD is better suited for income investors who want a step up in yield from treasuries without taking on junk bond risk.
What is the difference between HYG and LQD?▾
HYG (iShares iBoxx $ High Yield Corporate Bond ETF) tracks high yield bond investments with 1,200 holdings and a 0.49% expense ratio. LQD (iShares iBoxx $ Investment Grade Corporate Bond ETF) focuses on investment grade corporate bond with 2,700 holdings at 0.14%. Their top holdings overlap by 100%.
Can I own both HYG and LQD?▾
Since HYG and LQD have 100% holdings overlap, owning both means significant duplication. Most beginners are better off choosing one.