What is the main difference in fees between LQD and VCIT?

LQD has an expense ratio of 0.14% per year, while VCIT's is significantly lower at 0.03% per year. This represents a difference of 0.11 percentage points annually. Over long investment horizons, this seemingly small discrepancy can compound, affecting net returns. Investors should consider this when evaluating cost-efficiency for holding periods. Both funds offer exposure to corporate bonds, but the fee structure differs notably. The higher cost of LQD might reflect its longer history or other operational factors, though specific reasons require further data. For those prioritising minimal costs, VCIT offers a cheaper option. It is essential to weigh these fees against potential performance benefits. Remember, lower fees do not guarantee better returns, but they reduce the drag on investment growth over time.

How do the net assets of these two funds compare?

VCIT boasts substantial net assets of $68.3 billion, whereas LQD reports $27.5 billion. This means VCIT is more than twice the size of LQD in terms of assets under management. Larger fund size often provides better liquidity, meaning it may be easier to buy or sell shares without significantly impacting the share price. However, bigger funds might face challenges in maintaining tight tracking to their indices. Both figures indicate well-established funds with significant market presence. The size difference does not directly predict performance or suitability but can influence trading ease and fund operational efficiency. Investors often prefer larger funds for liquidity benefits, assuming other factors remain equal. These asset levels reflect their respective investor bases and market confidence over time.

Which fund has a higher dividend yield according to the data?

Based on the provided data, VCIT offers a higher annual dividend yield of 4.97% compared to LQD's 4.77%. This difference of 0.20 percentage points might appear small but can be meaningful over time through compounding. A higher yield means investors receive more periodic income relative to their initial investment. However, yields can fluctuate and are not guaranteed. The dividend distribution process for ETFs typically involves paying out interest and dividends from the underlying holdings. Investors should review recent distribution history rather than relying solely on this metric, as past yields don't ensure future payments.

How similar are the top holdings of LQD and VCIT?

The data indicates that there are no common top-10 holdings shared between LQD and VCIT. This suggests that despite both being corporate bond ETFs, they have distinct underlying portfolios and investment strategies. This could be due to different benchmark index compositions or active management styles employed by their issuers. The lack of overlap means their performance might diverge in response to specific corporate credit events. For an investor, holding both could theoretically provide broader diversification across the corporate bond market, though they remain in the same category. Top holdings are crucial as they significantly impact fund performance and risk profile. Always check for detailed holdings when considering multiple similar funds.

Are top holdings and sector weights available for these funds?

For both LQD and VCIT, the specific top holdings and sector weights are currently not available in the provided data profile. This lack of transparency means investors cannot directly compare the granular composition of their bond portfolios or the distribution of risk across sectors like industrial, financial, or technology. To assess sector exposure, one would typically examine a fund's holdings report, which details how much is invested in each credit sector. Without this information, understanding the nuanced differences in how each fund manages corporate bond risk becomes challenging. Investors should seek updated fact sheets from the issuers for comprehensive holdings data.

What index do LQD and VCIT track?

The provided data indicates that the specific index tracked by either LQD or VCIT is not available. Consequently, we cannot confirm their exact benchmarking methodologies or how they aim to replicate a particular corporate bond index. Generally, ETFs like these track an index to provide passive exposure to a defined market segment, with minimal fees and low turnover. The absence of this information means one cannot determine if either fund has potential tracking error or a different investment approach. Investors should consult the issuer's documentation to verify the precise index, which is critical for assessing the fund's strategy and market exposure.

How does the launch date affect the funds?

LQD was launched on 22 July 2002, giving it a long operational history of over two decades, while VCIT was launched on 19 November 2009, resulting in a shorter track record. The longer existence of LQD means it has experienced a more extensive array of market cycles and interest rate environments, which can be a point of interest for investors assessing resilience. However, VCIT's more recent inception means it operates under potentially more modern fund structures. Longer history provides more performance data points, which some investors find reassuring. The launch date is a key factor when evaluating a fund's experience.

Which fund is more cost-efficient for long-term investors?

From a cost perspective, VCIT is more cost-efficient due to its expense ratio of 0.03% per year compared to LQD's 0.14%. This difference of 0.11 percentage points annually can result in a more favourable net return over extended periods for VCIT, purely from the fee perspective. Lower expenses mean less erosion of capital during the investment tenure. While other factors like performance, holdings, and yield are important, fees are a guaranteed deduction. For long-term holders, minimising costs is a straightforward way to potentially improve overall investment outcomes. The data clearly shows VCIT has a substantial fee advantage in this comparison.

What type of investor is each fund typically associated with?

LQD, with its expense ratio of 0.14% and yield of 4.77%, is a long-established corporate bond ETF. It might appeal to investors seeking a well-known product with extensive historical performance data. In contrast, VCIT offers a lower expense ratio of 0.03% and a slightly higher dividend yield of 4.97%. VCIT could attract those prioritising cost efficiency in a large, popular fund. Both provide exposure to investment-grade corporate bonds but differ in structure and operational history. The choice often depends on individual preferences regarding fees, yield, and comfort with the issuer. These funds are typically used for diversified income.

What should a beginner know about using this ETF comparison page?

When reading this ETF vs ETF comparison for LQD and VCIT, a beginner should focus on the key metrics provided: the expense ratio, dividend yield, net assets, and fund size. Remember that past performance and historical yields are not reliable indicators of future results, and sector weightings or index tracking information are currently not available in this data profile. The purpose of this page is educational, to highlight the specific numerical differences between these two investment-grade corporate bond ETFs, such as their fee and yield gaps. It should be used as a starting point for personal research rather than as financial advice.

What is the main difference in fees between LQD and VCIT?

LQD charges an annual expense ratio of 0.14%, whereas VCIT costs 0.03% per year. This results in a difference of 0.11 percentage points. Over time, these fee differences can compound, impacting long-term net returns. For instance, on a theoretical $10,000 investment, the initial annual fee difference is $11 (before compounding effects). While both funds invest in investment-grade corporate bonds, the fee structure is a guaranteed deduction from returns. Lower fees generally benefit long-term holders, assuming other factors are equal. Investors should consider this cost differential as a key factor when comparing similar ETFs.

Which fund has a higher dividend yield according to the data?

According to the provided data, VCIT offers a higher annual dividend yield of 4.97%, compared to LQD's yield of 4.77%. This represents a difference of 0.20 percentage points in favour of VCIT. Dividend yields for bond ETFs primarily reflect the income generated from their underlying corporate bond holdings. While a higher yield can provide more immediate income, it is essential to remember that yields fluctuate with market conditions and are not guaranteed. Investors should review the distribution history and tax implications before making decisions based solely on current yield.

LQD vs VCIT

Two funds, one decision: we compare cost, performance and what each ETF actually holds in September 2026.

Compare the iShares iBoxx $ Investment Grade Corp Bond ETF (LQD) with the Vanguard Intermediate-Term Corporate Bond ETF (VCIT). This page examines fees, holdings, dividends, and how each fund tracks its market. LQD charges 0.14% while VCIT costs 0.03%; both focus on investment-grade corporate bonds. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

LQD

Metric

VCIT

0.14%

Expense Ratio

0.03%

4.77%

Dividend Yield

4.97%

$27.54B

Net Assets

$68.27B

3,172

Holdings

2,329

Jul 22, 2002

Inception Date

Nov 19, 2009

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Index Tracked

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Corporate Bond

Fund Category

Corporate Bond

VCIT costs about $11.00 less per year for every $10,000 invested.

Shared Top Holdings

These funds do not share any of their top holdings.

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Investment Analysis

LQD

Pros

LQD offers an expense ratio of 0.14% per year.
LQD has a reported net asset value of $27.5 billion.
The fund has been in existence since July 22, 2002.

Considerations

The annual dividend yield for LQD is lower at 4.77% compared to VCIT's higher yield.
A relatively high expense ratio of 0.14% is charged annually.
Sector weights are currently not available in the fund's profile.

VCIT

Pros

VCIT charges a significantly lower expense ratio of 0.03% per year.
The fund is reported to have substantial net assets of $68.3 billion.
The fund offers an annual dividend yield of 4.97% per year.

Considerations

VCIT was launched in November 2009, giving it a shorter operational history.
The fund's specific sector weightings are not currently available.
There are no common top-10 holdings shared with LQD, indicating different underlying holdings.

About LQD and VCIT

LQD (LQD)

This ETF provides broad access to the USD investment-grade corporate bond market, aiming to track its overall performance. With net assets of approximately USD 27.54 billion and a low expense ratio of 0.14%, it offers a diversified portfolio holding over 3,000 individual bonds. The fund is designed for investors seeking exposure to the fixed-income market, particularly those looking to complement equity holdings with debt securities. Currently, it offers a dividend yield of 4.77%, reflecting interest income from the underlying bonds. Investors should be aware that, like all fixed-income funds, its value can fluctuate due to changes in interest rates and credit conditions. It is essential to consider personal financial goals and risk tolerance before investing, as capital is not guaranteed.

VCIT (VCIT)

The Vanguard Intermediate-Term Corporate Bond ETF (VCIT) aims to track the performance of the US investment-grade corporate bond market, focusing on bonds with an average duration of roughly 3 to 10 years. With a low expense ratio of 0.03%, it offers investors broad exposure to thousands of high-quality companies. The fund holds around 2,329 securities, providing diversification across various industries. It currently offers a dividend yield of approximately 4.97%, which can be attractive for income-seeking investors. However, like all bond funds, VCIT is sensitive to changes in interest rates; rising rates can cause the fund's value to fall. While it provides steady income potential, investors should remember that capital is at risk, and returns are not guaranteed. It is a core holding option for those seeking diversified corporate credit exposure.

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LQD vs VCIT

Fund Snapshot