What do these ETFs track?

AGG is described as targeting core US bond markets, while BND focuses on the total US bond market. Both fall under the Intermediate Core Bond category, implying similar exposure to investment-grade bonds with intermediate durations. However, specific index tracked data is marked as 'not available' in the provided dataset. Investors should research each fund's detailed methodology to understand precise index criteria, sector inclusions, and exclusion rules, as these structural definitions significantly influence portfolio composition and behaviour across different economic cycles.

Why is the expense ratio important?

The expense ratio represents annual operating costs deducted from fund assets. Both AGG and BND charge 0.03%. A difference in these ratios creates a 'cost drag' on returns over time. If Fund A charged 0.50% and Fund B 0.10%, the 0.40 percentage-point difference would compound, noticeably reducing net returns after years of growth. For these specific funds, identical fees mean investors should focus on other factors like tracking error or portfolio diversification, as cost is not a differentiating element in this comparison.

How do ETFs generate dividend income?

Bond ETFs distribute income by paying out the periodic interest payments received from the underlying securities. AGG offers a dividend yield of 4.11%, while BND provides 4.10%. These yields reflect current interest rate levels and coupon payments from held bonds. Distributions are typically regular but can vary based on portfolio holdings and market conditions. Unlike individual bond maturity payouts, ETF dividends provide ongoing cash flow without requiring investors to sell shares, though yield levels can shift as interest rates change and portfolios reinvest maturing securities.

Are these ETFs identical?

No. While both target US intermediate core bonds with low 0.03% expenses, they are distinct products managed by iShares and Vanguard. Their inception dates differ (2003 vs 2007), as do their net assets ($137.3bn vs $162.5bn) and yields (4.11% vs 4.10%). Top holdings data is unavailable for both, though no shared top-10 holdings were listed, suggesting potentially different specific bond selections. These variations affect liquidity, tracking error, and tax implications, meaning they are alternatives rather than clones.

What is the overlap in their portfolios?

Based on the provided data, there are no shared top-10 holdings listed for either fund. This implies their portfolios may hold different individual bond securities, even if targeting similar market segments. Complete transparency into portfolio composition and sector weights is unavailable, which limits the ability to assess concentration risk or precise diversification overlap. Investors should review official fact sheets to determine if holdings differ significantly, as distinct bond selections can influence performance variance, especially when specific sectors or issuers outperform underperform.

Which fund suits income-focused strategies?

Income-focused strategies prioritise consistent payouts. Both funds offer comparable yields: AGG at 4.11% and BND at 4.10%. The marginal difference is negligible for most investors. Neither fund's investment focus details are available in this dataset, which is critical for assessing income stability and tax efficiency. Investors should evaluate personal tax circumstances and specific yield expectations, considering that distributions fluctuate with interest rates and underlying bond coupons. Both ETFs serve similar intermediate bond income objectives, requiring no strong preference based on yields alone.

What about diversification?

Diversification within bond ETFs depends on issuer, sector, and maturity spread. Sector weights and detailed investment focus are not available in the provided data for either fund, making a thorough analysis of concentration risks impossible. The lack of shared top-10 holdings suggests different specific securities. Investors should seek additional disclosures to verify if portfolios adequately spread credit and duration risks. Effective diversification in core bond ETFs reduces the impact of defaults or sector downturns, though precise allocation transparency is missing here.

How do these funds differ on fees?

According to the provided data, both funds charge identical expense ratios of 0.03%. This means investors will face the same base level of cost drag from management fees regardless of their choice. Over longer periods, if one fund's expense ratio were higher, the lower-cost option would typically result in slightly better compound returns. However, since the rates match here, other factors like the negligible yield difference of 0.01% percentage points and net asset size become more relevant in assessing the total effective cost of ownership.

Do they have the same net assets?

No. BND reports larger net assets at $162.5 billion compared to AGG at $137.3 billion. Both figures represent substantial scale, indicating strong investor adoption. Larger asset bases can sometimes support slightly better liquidity, facilitating more efficient trading with narrower bid-ask spreads, especially during market stress. While both are considered highly liquid given their massive size, the difference might be marginally relevant for very large institutional trades requiring minimal market impact, though for most retail investors, either fund is sufficiently liquid.

What impact do interest rates have?

As intermediate bond ETFs, both AGG and BND are sensitive to interest rate movements. When rates rise, bond prices typically fall, causing ETF market prices to decline despite the 4.11% (AGG) and 4.10% (BND) dividend yields. Longer durations amplify this price risk. Conversely, falling rates generally boost bond prices. These funds are not interest rate immune; they reflect current yield environments. Understanding your interest rate expectations is vital before investing in any intermediate core bond ETF, as price volatility accompanies yield changes.

Can I buy and sell these ETFs easily?

Yes, both funds trade on major stock exchanges throughout trading hours. With net assets of $137.3 billion (AGG) and $162.5 billion (BND), these funds possess significant liquidity, implying narrower bid-ask spreads and efficient trade execution. However, the absence of specific liquidity metrics or top-10 holding weights in the provided data means a deeper analysis of exact trading ease is limited. Generally, their massive asset bases make them straightforward to buy or sell compared to smaller or niche ETFs.

Why does data transparency matter?

Transparency is critical for accurate portfolio analysis. For both AGG and BND, data on specific index tracked, investment focus, top holdings, and sector weights is not available in this comparison. This lack of detail prevents assessing concentration risk, verifying diversification strategies, and fully understanding underlying credit exposures. Investors should request official prospectuses or fact sheets for full visibility. High transparency is essential to ensure you fully comprehend what the fund holds, its risks, and how it aligns with your specific financial objectives.

AGG vs BND

Two funds, one decision: we compare cost, performance and what each ETF actually holds in September 2026.

AGG (iShares Core US Aggregate Bond ETF) vs BND (Vanguard Total Bond Market ETF). Both expense ratio 0.03%. AGG net assets $137.3 billion and dividend yield 4.11%; BND net assets $162.5 billion and dividend yield 4.10%. Shared top-10 holdings none. Index tracked, top holdings and sector weights not available. Compare fees, holdings, dividends and how each fund tracks its market. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

AGG

Metric

BND

0.03%

Expense Ratio

0.03%

4.11%

Dividend Yield

4.10%

$137.27B

Net Assets

$162.51B

13,428

Holdings

15,000

Sep 22, 2003

Inception Date

Apr 3, 2007

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Index Tracked

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Intermediate Core Bond

Fund Category

Intermediate Core Bond

Both funds charge the same annual fee.

Shared Top Holdings

These funds do not share any of their top holdings.

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Investment Analysis

AGG

Pros

]iShares AGG offers a low 0.03% expense ratio, reducing cost drag on returns for intermediate core bond investors.
Net assets of $137.3 billion support strong liquidity and tight bid-ask spreads for institutional and retail trading.
A dividend yield of 4.11% provides regular income and reflects current interest rate levels in core bond markets.

Considerations

,
The fund's investment focus is not available, limiting transparency on portfolio composition and risk management.
Sector weights are not available, making it difficult to assess concentration risk across issuers or industries.

BND

Pros

]Vanguard BND matches iShares AGG with a 0.03% expense ratio, ensuring low-cost exposure to the total bond market.
Net assets of $162.5 billion provide high liquidity, facilitating large trades with minimal market impact for investors.
A dividend yield of 4.10% delivers consistent income, aligning closely with AGG in the intermediate core bond category.

Considerations

,
The fund's investment focus is not available, reducing visibility into its strategy and underlying asset allocation.
Sector weights are not available, which limits the ability to analyse diversification and identify potential concentration risks.

About AGG and BND

AGG (AGG)

The iShares Core US Aggregate Bond ETF (AGG) is designed to track the performance of the US investment-grade bond market. As one of the largest exchange-traded funds globally, with net assets exceeding USD 137 billion, it offers investors broad exposure to a diverse range of fixed-income securities. The fund holds over 13,000 different bonds, primarily focusing on Treasury, mortgage-backed, corporate, and other high-quality debt instruments. With an ultra-low expense ratio of 0.03%, it aims to provide cost-effective access to the intermediate core bond market. Since its inception in September 2003, AGG has become a staple for many portfolios, often used to balance equity volatility. Its current dividend yield stands at 4.11%. However, potential investors should remember that bond prices are sensitive to interest rate changes, and while this fund offers diversification, its value can rise and fall.

BND (BND)

The Vanguard Total Bond Market ETF (BND) is designed to track the performance of a broad, investment-grade U.S. bond market index. With an intermediate core bond focus, it holds over 15,000 securities, including U.S. Treasuries, government-backed mortgages, and corporate bonds. This extensive diversification aims to mitigate the impact of any single credit default. Investors often view BND as a foundational income component for balanced portfolios, seeking lower volatility compared to equities. The fund carries a minimal expense ratio of 0.03%, helping to preserve returns. While it currently offers a yield of approximately 4.10%, potential investors should remember that bond prices typically move inversely to interest rates. If rates rise, the fund's value may decline. Conversely, falling rates often support bond prices. BND provides a convenient way to access the fixed-income market, though returns are not guaranteed, and capital is at risk.

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AGG vs BND

Fund Snapshot