AGG vs BIV

AGGAiShares Core U.S. Aggregate Bond ETF

BIVAVanguard Intermediate-Term Bond ETF

In short

AGG Launched in 2003, one of the first funds to pack the entire U.S. investment-grade bond market into a single ticker: Treasuries, corporates and mortgage bonds, three basis points a year, cash paid monthly.

BIV Most bond funds hand you the entire market. BIV picks a lane: investment-grade U.S. government and corporate bonds in the 5-to-10-year band, sampled by Vanguard, priced at three basis points.

Stated mandate

AGG The fund seeks to track the Bloomberg U.S. Aggregate Bond Index, providing broad exposure to the total U.S. investment-grade bond market.

BIV The fund seeks to track a market-weighted bond index representing the intermediate-term investment-grade U.S. bond market. It uses index sampling and normally invests at least 80% of assets in securities represented by the index.

Why people hold it

• AGG 0.03% a year against a peer-group median near 0.36%. On a bond fund, the fee comes straight out of the coupon, so the gap matters more than it looks.
• A $100 billion-plus fund and very actively traded, the kind of depth that keeps bid-ask costs down for retail-sized orders.
• Tracks the Bloomberg U.S. Aggregate closely, with one of the tightest index-following records in its peer group. Income is distributed monthly.
• Running since 2003, giving it one of the longest track records among U.S. bond index ETFs.

• BIV 0.03% a year against a category median around 0.36%. In bonds, where returns are mostly coupon math, cost is one of the few levers you fully control.
• You pick the maturity band instead of inheriting it. The benchmark is a 5-10 year government/credit index: no mortgage pools, no 30-year tail dragging the duration around.vanguard.com
• Running since 2007 and among the closest index trackers in its peer group, with the trading depth that comes from a multi-billion-dollar asset base.
• Pays income monthly and spreads it across roughly 300 investment-grade bonds, so no single issuer carries the paycheck.

Worth knowing

• AGG Investment grade and U.S. dollar only. High-yield debt and foreign bonds sit outside the mandate, so this is designed as core ballast rather than a yield hunt.
• Rate risk comes as it comes. The index gets tracked whether yields rise or fall, with no manager stepping in to shorten duration.
• The same index is sold by SPAB, SCHZ and BBAG at the same 0.03%. The portfolio is the commodity here; scale and trading depth are the tiebreakers.

• BIV Intermediate duration cuts both ways. A 5-10 year portfolio reprices harder when yields move than a short-term fund does. Rate sensitivity is the main risk you are taking here.
• This is a slice, not the whole bond market. Aggregate funds at the same 0.03% (BND, SPAB, SCHZ) also carry mortgage-backed and short and long maturities that BIV leaves out.
• Investment-grade only, U.S. only. No high-yield sleeve and no foreign bonds, which is the point of the design but caps what the income stream can come from.

Full AGG profile⁠

Full BIV profile⁠