Investors choosing between iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSEMKT:LQD) and Schwab Long-Term U.S. Treasury ETF (NYSEMKT:SCHQ) must weigh lower costs and Treasury safety against the higher returns of corporate credit.
These two funds provide distinct paths for fixed-income exposure, helping investors balance yield and safety. the iShares fund targets a broad basket of investment-grade corporate bonds, while the Schwab fund focuses exclusively on the long end of the U.S. Treasury market. Each carries different risks regarding credit quality and interest rate sensitivity in changing economic environments.
Snapshot (cost & size)
|
Metric |
LQD |
SCHQ |
|---|---|---|
|
Issuer |
iShares |
Schwab |
|
Expense ratio |
0.14% |
0.03% |
|
1-yr return (as of June 3, 2026) |
6.10% |
5.20% |
|
Dividend yield |
4.60% |
4.80% |
|
Beta |
0.44 |
0.49 |
|
AUM |
$29.9 billion |
$765.6 million |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The Schwab fund is notably more affordable, sporting an expense ratio of 0.03% compared to 0.14% for LQD. Investors could also benefit from a slightly higher payout, as SCHQ offers a dividend yield of 4.80%.
Performance & risk comparison
|
Metric |
LQD |
SCHQ |
|---|---|---|
|
Max drawdown (5 yr) |
(24.90%) |
(40.90%) |
|
Growth of $1,000 over 5 years (total return) |
$998 |
$762 |
What’s inside
Schwab Long-Term U.S. Treasury ETF (NYSEMKT:SCHQ) holds 100 positions and focuses as closely as possible on the total return of the long-term U.S. Treasury bond market. Its reported sector exposure includes 91% in cash and others, 5% in technology, and 3% in communication services. Top holdings include Wi Treasury Bond at 2.29%, Treasury Bond at 2.11%, and another Wi Treasury Bond issue at 1.37%. This fund launched in 2019 and has paid $1.48 per share over the trailing 12 months. Its strategy makes it highly sensitive to interest rate fluctuations, which can drive significant price swings.
iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSEMKT:LQD) focuses instead on U.S. dollar-denominated, investment-grade corporate bonds. This fixed income fund reports three holdings and is highly diversified, as no single position exceeds 0.20% of the portfolio. It launched in 2002 and has a trailing-12-month dividend of $4.96 per share. By prioritizing corporate debt, the fund avoids the direct sovereign focus of SCHQ but remains sensitive to the credit health of the underlying issuers. The fund seeks investment results that correspond to an index of high-quality corporate debt.
