LQD charges a slightly lower expense ratio and offers a marginally higher yield than TLT.
LQD has delivered stronger returns and lower drawdowns over the past year and five years.
Both funds are highly liquid, but LQD holds a much broader mix of investment-grade corporate bonds versus TLT’s focus on long-term U.S. Treasuries.
The iShares iBoxx Investment Grade Corporate Bond ETF (NYSEARCA:LQD) is a broad corporate bond fund with a slightly lower fee and higher yield than the iShares 20 Year Treasury Bond ETF (NASDAQ:TLT), which focuses on long-duration U.S. Treasuries and has experienced deeper drawdowns in recent years.
LQD and TLT are both large, liquid fixed-income funds from iShares, but they serve different roles: LQD provides exposure to a wide array of investment-grade corporate bonds. At the same time, TLT focuses exclusively on U.S. Treasury bonds with maturities of 20 years or more. This comparison explores costs, returns, risk, and portfolio makeup to help investors weigh which fund best fits their needs.
| Metric | TLT | LQD |
|---|---|---|
| Issuer | iShares | iShares |
| Expense ratio | 0.15% | 0.14% |
| 1-year total return (as of 2026-02-27) | 3.92% | 7.07% |
| Dividend yield | 4.27% | 4.44% |
| Beta | 2.30 | 1.38 |
| AUM | $45.5 billion | $32.3 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-year return represents total return over the trailing 12 months.
LQD edges out TLT on cost, charging a slightly lower annual expense ratio, and also offers a modestly higher dividend yield for income-focused investors.
| Metric | TLT | LQD |
|---|---|---|
| Max drawdown (5 y) | (48.3%) | (24.9%) |
| Growth of $1,000 over 5 years (as of March 4, 2026) | $752 | $1,021 |
LQD tracks a diversified universe of investment-grade corporate bonds, holding more than 3,071 securities as of its 23.6-year track record. Its largest positions are in well-known issuers such as JPMorgan Chase, Bank of America, and Goldman Sachs, each accounting for over 2% of the portfolio. The fund’s focus on corporate debt may appeal to those seeking higher yields with moderate credit risk.
By contrast, TLT holds just 46 securities, all of which are long-dated U.S. Treasury bonds, with an effective portfolio duration of 15.6 years. Virtually all, or 99.9%, of the portfolio is in Treasuries with just 0.08% in cash and/or derivatives. This makes TLT highly sensitive to interest rate changes, but it avoids credit risk, since the U.S. government backs Treasuries.
For more guidance on ETF investing, check out the full guide at this link.
The iShares funds are quality bond funds to choose for 2026. Both offer low-cost ways to boost near-term income within a highly liquid, diversified bond portfolio.
The small difference in cost and yield could tilt the scales in TLT’s favor. It offers a 4.3% yield, which is not much lower than LQD’s 4.4%. LQD’s higher yield of 0.1% is not much when considering it’s a corporate bond fund, which adds issuer risk, whereas TLT’s income is government-backed.
While LQD has outperformed over the past five years, TLT’s long-duration portfolio could perform better if interest rates fall. The Federal Reserve’s recent pivot to an easing monetary policy could lead to lower rates. Generally, long-duration bonds like those in TLT are more sensitive to interest rate swings. LQD’s average portfolio duration is just under 8 years — significantly lower than TLT’s 15.6 years.
But investors will have to decide if TLT’s interest rate sensitivity is right for their situation. After all, it can work both ways. The spike in interest rates led to lower 5-year returns and higher volatility than LQD’s portfolio of corporate bonds. If interest rates don’t fall, investors may be better off going for the higher yield in LQD.
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