BND vs LQD: Correlation
How closely do Vanguard Total Bond Market ETF (BND) and iShares iBoxx Investment Grade Corporate Bond ETF (LQD) trade together? Their weekly returns over three years give a correlation of 0.97, which is very strong.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are BND and LQD?
Across a 3-year window, the weekly returns of BND and LQD correlate at 0.97, very strong, meaning they move nearly in lockstep. Recent behaviour matches the longer record: 0.95 over 1 year against 0.97 over 3. Stretching to 5 years gives 0.95, with an annualized covariance of 36.6 %².
Few assets follow BND as closely as LQD, which ranks #3 of 33 tracked partners. Neither side won the trailing year by much: +2.3% against +1.5%. The rolling one-year correlation stayed in a tight band between 0.93 and 0.98 over the past three years, which points to a structural rather than episodic relationship.
How is this computed?
Pearson correlation on weekly returns: ρ(A,B) = cov(rA, rB) / (σA · σB), over windows of 52, 156 and 260 weeks. Covariance is annualized (×52) and expressed in %². Full definitions on the methodology page.
BND vs LQD: side by side
| BND (Vanguard Total Bond Market ETF) | LQD (iShares iBoxx Investment Grade Corporate Bond ETF) | |
|---|---|---|
| 1-year return | +2.3% | +1.5% |
| 5-year return | -1.3% | -4.1% |
| Volatility (ann.) | 5.2% | 7.3% |
| Beta vs S&P 500 | 0.06 | 0.15 |
| Max drawdown (3Y) | -4.7% | -6.7% |
| Dividend yield | – | 4.66% |
| Expense ratio | – | 0.14% |
| Assets under management | – | $33.0B |
| Sector / category | ETF · Bonds | ETF · Bonds |
LQD, iShares's Corporate Bond fund, carries $33.0B under management, a 0.14% expense ratio, a 4.66% trailing dividend yield.
Year-by-year returns
| Year | BND | LQD |
|---|---|---|
| 2022 | -13.1% | -17.9% |
| 2023 | +5.7% | +9.4% |
| 2024 | +1.4% | +0.9% |
| 2025 | +7.1% | +7.9% |
| 2026 | +0.2% | -0.5% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are BND and LQD good diversifiers for each other?
No: a correlation of 0.97 means BND and LQD tend to fall together, which is precisely when diversification is supposed to help.
FAQ
What is the correlation between BND and LQD?
As of 2026-08-27, the correlation of weekly returns between BND and LQD is 0.97 over 3 years, 0.95 over 1 year and 0.95 over 5 years.
Is LQD a good diversifier for BND?
No: a correlation of 0.97 means BND and LQD tend to fall together, which is precisely when diversification is supposed to help.
What does a correlation of 0.97 mean?
Correlation ranges from −1 to +1. Values near +1 mean two assets move together, near 0 that they move independently, and negative values that they tend to move in opposite directions. It measures co-movement, not performance.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/bnd-vs-lqd.json
Embed this badge (it refreshes with the data), with attribution:
[](https://www.pairbook.io/pair/bnd-vs-lqd/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: BND correlations · LQD correlations
