LQD vs NZF: Correlation
How closely do iShares iBoxx Investment Grade Corporate Bond ETF (LQD) and Nuveen Municipal Credit Income Fund (NZF) trade together? Their weekly returns over three years give a correlation of 0.70, which is strong.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are LQD and NZF?
Across a 3-year window, the weekly returns of LQD and NZF correlate at 0.70, strong. The link has loosened recently: the 1-year correlation (0.50) runs below the 3-year figure (0.70). Stretching to 5 years gives 0.65, with an annualized covariance of 59.4 %².
By 3-year correlation, NZF places #15 of the 33 assets tracked against LQD. Over the last 12 months NZF came out ahead by 9.3 percentage points (+1.5% against +10.8%). One caveat on sizing: NZF is 1.6 times as volatile as the other leg, so an equal-dollar split is far from equal-risk.
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.
LQD vs NZF: side by side
| LQD (iShares iBoxx Investment Grade Corporate Bond ETF) | NZF (Nuveen Municipal Credit Income Fund) | |
|---|---|---|
| 1-year return | +1.5% | +10.8% |
| 5-year return | -4.1% | -4.1% |
| Volatility (ann.) | 7.3% | 11.6% |
| Beta vs S&P 500 | 0.15 | 0.30 |
| Max drawdown (3Y) | -6.7% | -12.4% |
| Market cap | – | $2.4B |
| P/E (trailing) | – | 13.5 |
| Dividend yield | 4.66% | 7.80% |
| Expense ratio | 0.14% | – |
| Assets under management | $33.0B | – |
| Sector / category | ETF · Bonds | US Listed |
On the fund side, LQD sits in the Corporate Bond category at iShares, with $33.0B under management, a 0.14% expense ratio, a 4.66% trailing dividend yield.
Year-by-year returns
| Year | LQD | NZF |
|---|---|---|
| 2022 | -17.9% | -25.5% |
| 2023 | +9.4% | +2.5% |
| 2024 | +0.9% | +10.1% |
| 2025 | +7.9% | +11.8% |
| 2026 | -0.5% | +2.4% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are LQD and NZF good diversifiers for each other?
Somewhat, no more. With 0.70 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between LQD and NZF?
Using weekly returns as of 2026-08-27: 0.70 over 3 years, with 0.50 over the last year and 0.65 over 5 years.
Is NZF a good diversifier for LQD?
Somewhat, no more. With 0.70 correlation, most large moves hit both names, and the diversification benefit stays modest.
What does a correlation of 0.70 mean?
A reading of 0.70 sits on a scale from −1 (opposite moves) through 0 (unrelated) to +1 (identical moves). Correlation captures direction, not magnitude or performance.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/lqd-vs-nzf.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/lqd-vs-nzf/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: LQD correlations · NZF correlations
