AGG vs BNDX

AGGAiShares Core U.S. Aggregate Bond ETF

BNDXAVanguard Total International 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.

BNDX The international half of a global bond portfolio with the currency risk stripped out. BNDX tracks investment-grade bonds from outside the US and hedges them back to dollars, so you get foreign rates and credit without the FX rollercoaster.

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.

BNDX Seeks to track a benchmark measuring the investment return of non-U.S.-dollar-denominated investment-grade bonds. It uses currency hedging and index sampling while maintaining broad exposure to major non-U.S. bond markets.

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.

• BNDX Hedges its foreign bond exposure back to US dollars, so results track overseas rates and credit rather than swings in the euro or yen.vanguard.com
• Charges 0.07% a year, near the floor for index bond funds, and covers the ex-US ground its stablemate BND leaves out.
• Running since 2013, one of the largest and most actively traded bond ETFs around, and it distributes monthly.
• Uses index sampling to hold a broad spread of investment-grade debt across the major non-US bond markets, one of the stronger builds in its peer group.vanguard.com

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.

• BNDX The hedge cuts both ways: it removes the lift from a falling dollar along with the drag from a rising one.
• Interest rates in Europe and Japan move this portfolio, and a currency hedge does nothing to soften that.
• No US bonds by mandate. It covers the ex-US slice of a bond allocation only.vanguard.com

Full AGG profile⁠

Full BNDX profile⁠