AGG vs BND: iShares Core U.S. Aggregate Bond ETF vs Vanguard Total Bond Market ETF Comparison
Compare AGG (iShares Core U.S. Aggregate Bond ETF) and BND (Vanguard Total Bond Market ETF) by expense ratio, dividend yield, holdings, and more.
Key Differences
- 1Dividend yield: BND 3.25% vs AGG 3.12%
- 2Holdings: AGG 11,245 vs BND 11,000
- 3Issuer: AGG (BlackRock(iShares)) vs BND (Vanguard)
Conclusion
AGG and BND each have different strengths, so the choice depends on your investment objectives. Choose the one with lower fees if cost is a priority, or the one with higher yield if income is your goal.
| Category | AGG | BND |
|---|---|---|
| Fund Name | iShares Core U.S. Aggregate Bond ETF | Vanguard Total Bond Market ETF |
| Current Price | ... | ... |
| Category | Bonds & Commodities | Bonds & Commodities |
| Expense Ratio | 0.03% | 0.03% |
| Dividend Yield | 3.12% | 3.25% |
| Holdings | 11245 | 11000 |
AGG Top Holdings
- 1. U.S. Treasury Bonds
- 2. MBS
- 3. Corporate Bonds
- 4. Government Agency Bonds
BND Top Holdings
- 1. U.S. Treasury Bonds
- 2. MBS
- 3. Corporate Bonds
- 4. Government Agency Bonds
- 5. Municipal Bonds
AGG Features
- •Bond investing
- •Stability
- •Low volatility
- •Diversification benefit
BND Features
- •Total US bond market
- •Ultra-low cost (0.03%)
- •Monthly dividend payments
- •Stable income
Pros & Cons
AGG
Advantages
- ✓ Portfolio stabilization
- ✓ Negative correlation with equities
- ✓ Stable returns
Disadvantages
- ⚠ Rising interest rate risk
- ⚠ Low returns
- ⚠ Inflation risk
BND
Advantages
- ✓ One of the most popular bond ETFs alongside AGG
- ✓ Very low expense ratio
- ✓ Broad diversification
Disadvantages
- ⚠ Rising interest rate risk
- ⚠ Disadvantaged in inflationary environment
- ⚠ Low returns
Investment Strategy
Best For: AGG
Stocks:bonds = 60:40 or age-adjusted ratio
Best For: BND
Stocks:bonds = 60:40 or age-adjusted ratio; alternative to AGG
Detailed Analysis
AGG (iShares Core U.S. Aggregate Bond ETF) and BND (Vanguard Total Bond Market ETF) Both belong to the Bonds & Commodities category, covering a similar investment area but with different strategies. AGG: iShares Core U.S. Aggregate Bond ETF (AGG) is an exchange-traded fund that provides investors with exposure to bonds, gold, and other commodities. It carries an expense ratio of 0.03%. The fund offers a dividend yield of approximately 3.12%. The portfolio holds 11245 securities. With an expense ratio of 0.03% and dividend yield of 3.12%, its top holdings include U.S. Treasury Bonds, MBS, Corporate Bonds. Key features include Bond investing, Stability, with Portfolio stabilization being a major advantage. BND: Vanguard Total Bond Market ETF (BND) is an exchange-traded fund that provides investors with exposure to bonds, gold, and other commodities. It carries an expense ratio of 0.03%. The fund offers a dividend yield of approximately 3.25%. The portfolio holds 11000 securities. With an expense ratio of 0.03% and dividend yield of 3.25%, top holdings include U.S. Treasury Bonds, MBS, Corporate Bonds. Notable features are Total US bond market, Ultra-low cost (0.03%), with One of the most popular bond ETFs alongside AGG as a core strength.
Investment Recommendation
AGG is suitable for Stocks:bonds = 60:40 or age-adjusted ratio, while BND is suitable for Stocks:bonds = 60:40 or age-adjusted ratio; alternative to AGG. Since both ETFs are in the same category, choosing one for your portfolio is more efficient. Base your decision on expense ratio, liquidity, and issuer preference. For beginners, we recommend a core-satellite strategy: choose a low-cost, well-diversified ETF as your core holding, and allocate the rest to satellite positions.
Key Summary
Both AGG and BND are excellent ETFs for their respective investment objectives. The key is to choose based on your investment goals, time horizon, and risk tolerance. Rather than focusing on a single metric (dividend yield, fees, etc.), evaluate from a holistic portfolio perspective. Use our rebalancing calculator to easily determine the optimal asset allocation including both ETFs.
AGG vs BND Investment Guide
Both AGG and BND are popular US ETFs, but they differ in investment strategy and portfolio role. AGG has an expense ratio of 0.03%, while BND charges 0.03%, Both ETFs share the same cost structure. In terms of dividend yield, AGG offers 3.12% while BND offers 3.25%, making BND the better choice for income investors.
When choosing between the two, consider your investment goals, time horizon, and risk tolerance. If long-term growth is your priority, favor the ETF with lower fees and broader diversification. If you need steady cash flow, the higher-yielding ETF may be more suitable. You can also hold both in your portfolio for a complementary approach.
Regardless of which ETF you choose, maintaining your target allocation through regular rebalancing is key to long-term performance. Review your portfolio quarterly or semi-annually, and adjust if weights have drifted significantly. Our rebalancing calculator can automatically determine the buy/sell quantities for each holding.
5 Things to Check When Comparing ETFs
Expense Ratio: Even a 0.1% difference in fees can translate to thousands of dollars over long-term investing. When two ETFs track a similar index, the lower-cost option has the edge.
Tracking Index & Holdings: Even ETFs in the same category may track different indices. Review the top holdings and sector weights to find the best fit for your investment goals.
Dividend Policy: Compare dividend frequency (monthly vs quarterly), yield, and dividend growth rate. Monthly dividend ETFs may be preferable if you need regular cash flow.
Trading Volume & Liquidity: Sufficient daily trading volume ensures you can buy and sell at fair prices. Low-volume ETFs may have wider bid-ask spreads, increasing your trading costs.
Portfolio Role: Determine whether the ETF serves as a core or satellite holding in your portfolio, and size your position accordingly.