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Is LQD Good?

In the other article, I did a resaerch on Franklin Income fund and found that the fund did pretty well during the 2000 and the 2008 financial crisis. Then I became curious about if any bond ETF can beat Franklin Income fund. I found LQD,iShares iBoxx Inv Grade Corporate Bond ETF.

Does LQD Pay Increasing Dividends?

No, it doesn't.

Sharpe Ratio

  • Data range: 2002/7/30 - 2022/7/1
  • Mean annual return for SPY is 12.461%, better than 5.791% of LQD's.
  • Annual return standard deviation for SPY is 16.901%, worse than 6.462% of LQD's.
  • Mean return divided by standard deviation for SPY is 0.737, worse than 0.896 of LQD's. 
  • Wtih the risk free rate being 2%, SPY's Sharpe ratio is 0.619 which is better than LQD's 0.587.
  • FKINX's mean return is 7.873%, standard deviation is 14.156%, Sharpe ratio is 0.5561 when the rate is 0% and 0.405 when the rate is 2%.

SPY

LQD

Invested At the High Before 2008 Financial Crisis

  • LQD beat SPY about 7 years from the high from 2007/10/9 to May of 2015.
  • LQD beat FKINX almost all the way  from 2007/10/9 to May of 2015 till 2022/5/12.
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