ETF Versus

LQD vs SHY

iShares iBoxx $ Investment Grade Corporate Bond ETF vs iShares 1-3 Year Treasury Bond ETF

Last updated: 2026-04-02

LQD iShares

iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) is an exchange-traded fund issued by iShares that provides exposure to investment-grade U.S. corporate bonds. It charges a low expense ratio of 0.14%. The fund offers a high dividend yield of 4.53%. Launched in 2002, the fund has a 24-year track record.

AUM: $29.2B ER: 0.14% Yield: 4.53% Since: Jul 22, 2002
SHY iShares

iShares 1-3 Year Treasury Bond ETF (SHY) is an exchange-traded fund issued by iShares that provides exposure to short-duration U.S. Treasury bonds with low interest rate risk. It charges a low expense ratio of 0.15%. The fund offers an attractive dividend yield of 3.76%. Launched in 2002, the fund has a 24-year track record.

AUM: $24.6B ER: 0.15% Yield: 3.76% Since: Jul 22, 2002

Quick Verdict

Both funds have nearly identical expense ratios (0.14% vs 0.15%), so fees are not a differentiator here. Both funds have delivered similar 1-year returns (0.0% vs -0.2%), tracking closely. Income investors may prefer LQD for its higher yield (4.5% vs 3.8%).

Key Metrics

Metric LQD SHY
Expense Ratio 0.14% 0.15%
Dividend Yield 4.5% 3.8%
Fund Family iShares iShares
Category US Investment Grade Corporate US Short-Term Treasury

Performance Chart

Indexed to 100 at start (5-year comparison)

75 81 87 93 99 105 2021-04 2022-06 2023-09 2024-12 2026-04
LQD -16.4%
SHY -4.5%

Performance Comparison

Period LQD SHY Difference
1 Month -2.04% -0.59% -1.45%
3 Months -1.36% -0.65% -0.71%
6 Months -2.59% -0.57% -2.02%
YTD -1.36% -0.65% -0.71%
1 Year +0.00% -0.19% +0.19%
3 Years -1.16% +0.29% -1.45%
5 Years -16.40% -4.51% -11.89%

Fee Impact Over Time

Estimated fee cost difference assuming 8% annual returns

Investment Period LQD Fees SHY Fees You Save
$10.000 10 years $278 $298 $20
$10.000 20 years $1.194 $1.278 $84
$10.000 30 years $3.841 $4.109 $269
$50.000 10 years $1.391 $1.490 $99
$50.000 30 years $19.203 $20.547 $1.344
$100.000 30 years $38.406 $41.094 $2.688

Risk Metrics

Based on 5 years of daily returns

Metric LQD SHY
Annualized Volatility 8.7% 2.1%
Max Drawdown -27.9% -6.7%
Sharpe Ratio -0.89 -2.55

Dividend Comparison

Metric LQD SHY
Annual Dividend (per share) $4.92 $3.10
Dividend Yield 4.53% 3.76%
Distribution Frequency Monthly Monthly

Which One Should You Choose?

Choose LQD if...

you prioritize dividend income and want higher regular distributions from your portfolio.

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