AGG vs FFIU

AGGAiShares Core U.S. Aggregate Bond ETF

FFIUDUVA Unconstrained Medium-Term Fixed Income 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.

FFIU A go-anywhere bond fund with a human at the wheel: no index to track, just an active manager picking across the fixed income market for current income. It has been running since 2017.

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.

FFIU The Fund seeks current income with limited risk to principal by investing mainly in fixed income securities of any kind. It normally invests at least 80% of assets in those securities.

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.

• FFIU Unconstrained means unconstrained: no benchmark to hug, and the prospectus allows fixed income of any kind, plus up to 20% in futures, options, cash or other funds.sec.gov
• Built for income, not fireworks. At least 80% of assets sit in fixed income, the stated aim is current income with limited risk to principal, and cash goes out quarterly.sec.gov
• Trading since 2017, so there is a real multi-year record across very different rate environments rather than a backtest.

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.

• FFIU Costs 0.54% a year, above the roughly 0.36% median for core bond ETFs and well above index giants like BND, SPAB and SCHZ at 0.03%.
• Small and thinly traded, which usually means wider bid-ask spreads and more gap between your fill price and the fund's underlying value.
• Outcomes hinge on the manager's judgment rather than a published index, so there is no benchmark to measure the portfolio against day to day.

Full AGG profile⁠

Full FFIU profile⁠