HY Bonds vs IG Bonds (ETFs)
Live side-by-side comparison with current values, changes, and key statistics.
Why This Comparison Matters
HYG holds junk-rated corporate bonds while LQD holds investment grade. Their relative performance directly measures how aggressively investors are reaching for yield. When HYG outperforms, risk appetite is strong. When LQD leads, investors are rotating up in quality and pricing in recession or credit stress.
Cross-Asset Analysis
To orient the reader: High Yield Credit (HYG) represents iShares iBoxx High Yield Corporate Bond ETF and IG Credit (LQD) represents iShares iBoxx Investment Grade Corporate Bond ETF, which is why this comparison sits in the peer pair category on Convex. A peer comparison like High Yield Credit (HYG) against IG Credit (LQD) strips out the common-factor beta and leaves behind the differences in sector mix, capitalization, style, or geography. Factor exposures embedded inside High Yield Credit (HYG) and IG Credit (LQD) drive their relative performance, with growth-value, large-small, and domestic-international all surfacing in the spread.
Flows matter for the High Yield Credit (HYG)-IG Credit (LQD) relationship: when one peer attracts more capital, it outperforms on demand pressure that often mean-reverts. Inside the Credit & Financial Stress universe, High Yield Credit (HYG) and IG Credit (LQD) represent different flavors of the same underlying exposure. High Yield Credit (HYG) and IG Credit (LQD) look similar at a glance, but the embedded factor tilts between them matter substantially over time.
Pairs like High Yield Credit (HYG) and IG Credit (LQD) trade tighter than either leg does individually, because the common component is high and the remaining idiosyncratic share is what the pair expresses. Idiosyncratic events in a concentrated peer, such as a single mega-cap earnings miss inside High Yield Credit (HYG), can move the High Yield Credit (HYG)-IG Credit (LQD) spread without broader factor signal.
90-Day Statistics
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Frequently Asked Questions
What is the relationship between High Yield Credit (HYG) and IG Credit (LQD)?+
High Yield Credit (HYG) and IG Credit (LQD) are connected through shared asset class exposure with different factor tilts. When the underlying asset class shifts, both respond, though with different sensitivities and at different speeds. The spread between High Yield Credit (HYG) and IG Credit (LQD) captures the specific macro signal that flows through this relationship.
When does High Yield Credit (HYG) typically lead IG Credit (LQD)?+
High Yield Credit (HYG) tends to lead IG Credit (LQD) during rotation episodes between the two factor exposures. In those periods, moves in High Yield Credit (HYG) precede corresponding moves in IG Credit (LQD) by days to weeks, depending on the transmission channel and the depth of each market.
How are High Yield Credit (HYG) and IG Credit (LQD) historically correlated?+
Long-run correlation between High Yield Credit (HYG) and IG Credit (LQD) varies by regime. Peers in the same asset class are highly correlated in direction, with the spread reflecting factor tilts and rotation dynamics. The correlation is not stable: it shifts with macro conditions, and the periods when it breaks down are often the most informative moments in the High Yield Credit (HYG)-IG Credit (LQD) relationship.
What macro conditions drive divergence between High Yield Credit (HYG) and IG Credit (LQD)?+
Divergence between High Yield Credit (HYG) and IG Credit (LQD) typically arises from index reconstitution, mega-cap earnings surprises, or liquidity differences between the peers. When one asset's idiosyncratic drivers dominate, the spread moves in ways that the common macro story does not predict, which is usually a signal to look more carefully at the specific drivers at work in High Yield Credit (HYG) or IG Credit (LQD).
Is High Yield Credit (HYG) a hedge for IG Credit (LQD)?+
Peers like High Yield Credit (HYG) and IG Credit (LQD) do not hedge each other; both rise or fall with the shared asset class, and using the pair as a spread trade is different from using it as a hedge. Effective hedging requires matching the hedge to the specific risk being protected, and the High Yield Credit (HYG)-IG Credit (LQD) pair is best stress-tested under scenarios the investor most worries about before being sized into a real portfolio.
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Data sourced from FRED, CoinGecko, CBOE, and other providers. This page is for informational purposes only and does not constitute financial advice. Past performance does not guarantee future results.