LQD Offers Broader Bond Exposure Than VCLT, But With Higher Fees and Lower Yield

Core Insights - The Vanguard Long-Term Corporate Bond ETF (VCLT) and the iShares iBoxx Investment Grade Corporate Bond ETF (LQD) focus on investment-grade U.S. corporate bonds but differ in maturity range, diversification, and cost structure, making them suitable for different types of fixed-income investors [1] Cost & Size Comparison - VCLT has a lower expense ratio of 0.03% compared to LQD's 0.14%, providing a cost advantage [2][3] - As of November 6, 2025, VCLT has a 1-year return of -1.21%, while LQD has a return of 1.34% [2] - VCLT offers a higher dividend yield of 5.37% compared to LQD's 4.35% [2][3] - VCLT has assets under management (AUM) of $8.53 billion, while LQD has AUM of $31.79 billion [2] Performance & Risk Analysis - Over the past five years, VCLT experienced a maximum drawdown of 34.31%, while LQD had a drawdown of 24.96% [4] - The growth of $1,000 invested over five years would result in $704 for VCLT and $811 for LQD [4] Portfolio Composition - VCLT holds 1,797 bonds with maturities ranging from 10 to 25 years, primarily from the industrials sector (68%), followed by finance (17%) and utilities (14%) [5] - LQD has a broader exposure with 2,998 holdings, heavily weighted in banking (23%), consumer non-cyclical (18%), and technology (12%) [6] Investment Strategy - VCLT's concentrated approach may lead to higher returns but also increased volatility, as indicated by its higher beta of 2.06 and lower one-year total returns [8] - LQD offers more stability through greater diversification and lower price volatility, but has a higher expense ratio and lower dividend yield compared to VCLT [9]