AGG vs IAGG

AGGAiShares Core U.S. Aggregate Bond ETF

IAGGAiShares Core International Aggregate 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.

IAGG The other half of the bond market, in dollars. IAGG holds investment-grade debt issued outside the US, developed and emerging, and hedges the currency swings back to USD for seven 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.

IAGG The fund seeks to track an index representing global investment-grade bonds outside the United States, with exposure across developed and emerging markets and currency hedging to the U.S. dollar.

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.

• IAGG 0.07% a year for a global bond book. The median fund in its aggregate-bond peer group charges around 0.36%, and it is priced level with rival BNDX.
• Currency exposure is hedged to the dollar, so results track the bonds themselves rather than moves in the yen, euro or pound.ishares.com
• Roughly 7,900 bonds spanning developed and emerging markets outside the US, with a 10% issuer cap in the index keeping any one borrower in check.
• Running since 2015 inside the iShares Core lineup, a multi-billion-dollar fund that trades actively and pays quarterly.

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.

• IAGG The hedge works both ways. It strips out currency losses and currency gains alike, so a sliding dollar adds nothing here.
• No US bonds at all. It is built as the ex-US complement to a domestic core holding such as BND or IUSB, not a standalone bond sleeve.
• Hedging covers currency, not duration. These are investment-grade bonds, and their prices still move as global interest rates move.

Full AGG profile⁠

Full IAGG profile⁠