DV
Dividend Vision

ETF Comparison

BND vs LQD: Which Is the Better Pick in 2026?

A head-to-head comparison of Vanguard Total Bond Market ETF and iShares iBoxx $ Investment Grade Corporate Bond ETF covering yield, cost, risk, and income potential.

Updated October 2, 2026

How these figures are calculated: methodology.

Best for

  • BNDInvestors who want fixed-income ballast that steadies the portfolio when stocks fall.
  • LQDInvestors who want higher current income (5.17% vs 4.26% for BND).

Jump to the side-by-side numbers

Visual comparison

Key metrics

Projected income on $10K

Projections assume the current yield and share price remain constant. Actual results will vary.

Total returns

100% reinvested · ex-date convention. Period returns use this fixed assumption, independent of chart settings. YTD and 1Y are cumulative period returns; 3Y, 5Y, and 10Y are annualized. The shared Since-start window is annualized only when it covers at least one year.

BND has outpaced LQD over the trailing twelve months, posting a -2.04% total return against -4.33%. The picture flips over 10 years, though — LQD has compounded at 1.74% a year, ahead of BND at 1.10%. BND has been the steadier holding, though — annualized volatility of 5.1% against 7.1% for LQD. Figures are total returns: price change plus every distribution reinvested.

Total return and risk statistics by fund. Each row is one fund; each column is one period or statistic.
SymbolYTD cumulative1Y cumulative3Y annualized5Y annualized10Y annualizedSince Apr 2007Volatility Sharpe Sortino Max drawdown
BND-2.63%-2.04%4.29%-0.71%1.10%2.82%5.1%-0.06-0.08-4.7%
LQD-4.25%-4.33%5.00%-1.39%1.74%3.81%7.1%0.060.08-6.3%

Total return with all distributions reinvested on the ex-dividend date (a modeling convention, not the cash-settlement date), split-adjusted, as of October 2, 2026. YTD and 1Y are cumulative period returns; 3Y, 5Y, and 10Y are annualized. The shared Since-start window is annualized only when it covers at least one year. “Since Apr 2007” measures every fund from April 10, 2007 — the start of shared available history — so all funds share one comparison window. Volatility is the annualized standard deviation of daily total returns over the trailing 3 years. Sharpe and Sortino divide the annualized return in excess of the risk-free rate by, respectively, that volatility and the downside deviation (both over the trailing 3 years) — higher is better. Max drawdown is the largest peak-to-trough total-return decline over the same window — shallower is better.

Side-by-side snapshot

Side-by-side snapshot. Each row is one metric; each column is one fund.
MetricBNDLQD
Full nameVanguard Total Bond Market ETFiShares iBoxx $ Investment Grade Corporate Bond ETF
IssuerVanguardiShares
Underlying indexBloomberg U.S. Aggregate Float Adjusted IndexMarkit iBoxx USD Liquid Investment Grade Index
Last Close$69.94 as of October 2, 2026$101.83 as of October 2, 2026
Distribution rate4.26%5.17%
Trailing 12-month yield4.20%4.96%
Distribution Safety Score™ 100100
Safety-Adjusted Yield 4.26%5.17%
Expense ratio0.03%0.14%
AUM$162B$27.2B
Distribution frequencyMonthlyMonthly
ObjectiveTrack the Bloomberg U.S. Aggregate Float Adjusted Index for broad U.S. bond exposure.Provide exposure to the fund's underlying index or strategy per issuer materials.
Asset classFixed IncomeFixed Income
Inception date04/03/200707/22/2002
Beta0.981.35
Last dividend$0.2485 declared, pays 10/05/2026$0.43866 declared, pays 10/06/2026
Ex-dividend date10/01/202610/01/2026

Bottom lineChoose BND if you want fixed-income ballast that steadies the portfolio when stocks fall. Choose LQD if you want higher current income (5.17% vs 4.26% for BND).

Model this comparison:
Compare in my portfolio Forecast income Save to watchlist

Income calculator

See how much monthly income a hypothetical investment would generate in each ETF at current yields.

Vanguard
ETFs116
Total AUM$4676B

ETFs and AUM reflect what Dividend Vision tracks — the issuer's full lineup may be larger.

Vanguard is one of the largest and most established ETF issuers, known for low-cost, broadly diversified fund offerings built on passive indexing principles. Their lineup spans multiple asset classes and strategies, including core equity and bond index funds, dividend-focused portfolios, ESG-screened options, factor-based strategies, sector exposure, target-date retirement funds, and international investments across developed and emerging markets. The platform is characterized by its emphasis on accessibility and cost efficiency across a comprehensive range of fund families, serving both individual investors seeking broad market exposure and those pursuing specific income, sustainability, or thematic objectives.

See our curated list of related YouTube videos on BND.

See all Vanguard ETFs
iShares
ETFs466
Total AUM$4683B

ETFs and AUM reflect what Dividend Vision tracks — the issuer's full lineup may be larger.

iShares is one of the largest ETF providers globally, known for offering a broad, diversified lineup of exchange-traded funds across multiple asset classes and investment strategies. The company operates 215 funds spanning 15 distinct families, including popular offerings in dividend income, covered call strategies, bonds, equities, ESG-focused investments, and factor-based approaches, with widely-held tickers like AGG (bond), ACWI (global equity), and AOA (allocation). iShares is characterized by its comprehensive fund ecosystem that serves both core portfolio holdings and specialized investment strategies, making it a prominent player for investors seeking both traditional and alternative income-generating ETF solutions.

See our curated list of related YouTube videos on LQD.

See all iShares ETFs

Want to go deeper?

Add these ETFs to a sample portfolio and forecast your dividend income over 5+ years — free to start, no credit card.

Compare in my portfolio Forecast income Save to watchlist

Quick verdict

BND (Vanguard Total Bond Market ETF) and LQD (iShares iBoxx $ Investment Grade Corporate Bond ETF) are both monthly-pay dividend ETFs, but they take different approaches.

LQD offers the higher yield at 5.17% vs 4.26% for BND. A higher yield means more current income per dollar invested, though it may come with different risk characteristics.

BND is cheaper with an expense ratio of 0.03% compared to 0.14%.

They have different reference exposures: BND is linked to Bloomberg U.S. Aggregate Float Adjusted Index while LQD is linked to Markit iBoxx USD Liquid Investment Grade Index, which means their performance drivers differ.

BND is the larger fund by assets ($162B), but assets alone do not establish trading costs or liquidity.

Who should choose each?

Choose BND

Vanguard Total Bond Market ETF

  • Want fixed-income ballast that cushions equity drawdowns.
  • Want to keep costs low — a 0.03% expense ratio vs 0.14% for LQD.
  • Prefer lower volatility — a beta of 1.0 vs 1.4 for LQD.

Choose LQD

iShares iBoxx $ Investment Grade Corporate Bond ETF

  • Want higher current income — LQD yields 5.17% vs 4.26% for BND.
  • Want fixed-income ballast that cushions equity drawdowns.

Not sure? Use the income calculator and snapshot above to weigh these trade-offs against your own goals.

Deep dive

Yield & income

On a $10,000 investment, BND would generate roughly $35.50 cash per distribution, while LQD would produce $43.08 cash per distribution, at current distribution rates. Both pay monthly distributions.

BND yield4.26%
LQD yield5.17%
Cash diff on $10K$7.58

Cost & efficiency

Over 10 years on $10,000, BND would cost approximately $30 in fees vs $140 for LQD (simplified, not compounded). The $110.00 difference may be offset by yield or performance.

BND ER0.03%
LQD ER0.14%

Strategy & risk

BND tracks Bloomberg U.S. Aggregate Float Adjusted Index with a bonds approach, while LQD tracks Markit iBoxx USD Liquid Investment Grade Index with a bonds approach. Beta is 0.98 for BND and 1.35 for LQD, making BND the less volatile of the two by this measure.

BND beta0.98
LQD beta1.35

Fund details

BND is managed by Vanguard (launched 04/03/2007) with $162B in assets. LQD is managed by iShares (launched 07/22/2002) with $27.2B in assets.

BND AUM$162B
LQD AUM$27.2B
Ready to act?
Open in Comparator Model in portfolio See pricing

Enjoyed this page?

Do us a favor — if you found this comparison useful, please share it with a friend researching dividend ETFs.

Frequently asked questions

What is the current distribution rate for BND and LQD?

BND currently distributes 4.26% and LQD 5.17%, based on fund data updated October 2026. Distribution rate moves with both the payout and the share price, so check the as-of date before relying on either figure.

Is BND or LQD better for dividend income?

It depends on your goals. LQD currently offers the higher distribution yield, which means more income per dollar invested. However, a lower-yield fund may offer better total return or lower volatility. Consider your time horizon and risk tolerance.

What is the difference between BND and LQD?

BND (Vanguard Total Bond Market ETF) tracks Bloomberg U.S. Aggregate Float Adjusted Index with a bonds approach, while LQD (iShares iBoxx $ Investment Grade Corporate Bond ETF) tracks Markit iBoxx USD Liquid Investment Grade Index with a bonds approach. They are issued by Vanguard and iShares respectively.

Can I hold both BND and LQD?

Yes — nothing prevents holding both. Whether the combination actually diversifies depends on how much the underlying exposures overlap, which isn't fully measurable from the data on this page; review each security's holdings, sector, and strategy before treating them as complementary.

Is BND or LQD safer?

By Dividend Vision's Distribution Safety Score — a rules-based 0–100 estimate of how resilient a distribution looks, where higher is safer — they are effectively tied: BND scores 100, LQD scores 100. Neither has a clear safety edge on that measure. BND has also shown lower price volatility (beta 0.98 vs 1.35 for LQD). No score makes an investment risk-free — treat this as a screening signal, not a guarantee.

Which has lower fees, BND or LQD?

BND has an expense ratio of 0.03% while LQD charges 0.14%. Lower fees mean more of your investment returns stay in your pocket over time.

How much income does $10,000 in BND vs LQD generate?

At current rates, $10,000 in BND would generate roughly $35.50 cash per distribution ($426.00 annually). The same in LQD would produce about $43.08 cash per distribution ($517.00 annually).

Which has performed better historically, BND or LQD?

BND has outpaced LQD over the trailing twelve months, posting a -2.04% total return against -4.33%. The picture flips over 10 years, though — LQD has compounded at 1.74% a year, ahead of BND at 1.10%. BND has been the steadier holding, though — annualized volatility of 5.1% against 7.1% for LQD. Figures are total returns: price change plus every distribution reinvested. Past performance does not guarantee future results.

More comparisons to explore

BND vs LQD — at a glance

Generated October 3, 2026.

Overview

BND and LQD are both investment-grade bond ETFs that track fixed-income indexes but serve different portfolio roles. BND offers broad exposure to the entire U.S. bond market—Treasuries, corporate, mortgage-backed, and asset-backed securities—while LQD focuses exclusively on investment-grade corporate bonds. The key distinction is scope: BND is a market-cap-weighted total return vehicle; LQD is a concentrated corporate-bond play with higher yield and greater interest-rate sensitivity.

How they differ

BND holds the full Bloomberg U.S. Aggregate index and therefore includes substantial Treasury and mortgage exposure alongside corporates, while LQD isolates the corporate segment via the Markit iBoxx USD Liquid Investment Grade Index. The biggest yield gap reflects this: LQD's 5.17% beats BND's 4.26% because corporate bonds carry more credit risk premium than the aggregate average. BND's 0.03% is cheaper than LQD's 0.14%, but LQD's narrower focus introduces higher duration and credit-spread risk—its 1.35 is notably higher than BND's 0.98, meaning it swings harder in response to rate moves. BND is also far larger, with $162B in assets compared to $27.2B for LQD.

Who each is best for

BND: Fits investors seeking a single, low-friction holding for broad fixed-income allocation across all major bond sectors; works well as a core bond anchor where simplicity and minimal fees matter more than yield extraction.

LQD: Designed for investors who want to tilt toward corporate-bond exposure and can tolerate swings tied to credit spreads and rate volatility; suited to those comfortable with higher duration risk in exchange for a meaningful yield lift.

Key risks to know

  • Interest-rate sensitivity and duration risk: LQD's higher beta of 1.35 versus BND's 0.98 means LQD's price will fall harder when rates rise and rebound more sharply when rates fall. BND's broader composition and lower duration reduce this swing, making it a steadier holding through rate cycles.
  • Credit and spread risk: LQD's concentration in corporate bonds exposes it to credit events, widening spreads, and recession-driven downgrades. BND's Treasury and mortgage content provides a buffer; when corporate spreads blow out, LQD may experience sharper NAV declines than BND.
  • Yield sustainability and valuation: LQD's 5.17% yield is materially higher than BND's 4.26%, but changes in corporate default rates, refinancing risk, or falling yields can compress that excess. BND's lower yield more closely mirrors underlying bond returns across the full curve.

Bottom line

If you want one simple, low-cost bond holding covering the full market, BND's breadth and 3-basis-point fee are hard to beat. If you're building a fixed-income ladder and want to overweight corporate bonds for their yield pickup, LQD adds that exposure but demands comfort with higher rate and credit sensitivity. Past performance does not guarantee future results.

AI-generated analysis for educational purposes only. Verify important details independently; past performance does not guarantee future results.

Learn the method

The metrics behind this comparison, explained in the Academy.

Bond fund basics How to read a fund's stats Why total return beats chasing yield

Still deciding? Compare them against your own portfolio

See how each ETF fits alongside your real holdings — forecast future income, analyze overlap, and gauge risk. Start a free 7-day Dividend Vision trial and make the call with your full portfolio in view.

Start Free Open in Comparator Browse Screener

These comparisons follow the Dividend Vision methodology.