AGG vs TAGG

AGGAiShares Core U.S. Aggregate Bond ETF

TAGGAT. Rowe Price QM U.S. 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.

TAGG Active bond management at index-fund pricing. T. Rowe Price runs quant models plus human credit research across roughly 600 U.S. investment-grade bonds, aiming to beat the Agg rather than copy it, for 0.08% a year.

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.

TAGG The fund seeks total returns above the U.S. investment-grade bond market by investing primarily in U.S. bonds and using quantitative models alongside fundamental bond research.

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.

• TAGG 0.08% a year, a fraction of the typical fund in the aggregate-bond group and within shouting distance of plain index trackers. Rare pricing for an actively run portfolio.
• The mandate is to exceed the Bloomberg U.S. Aggregate Bond Index, not mirror it, using quantitative models alongside fundamental bond research.troweprice.com
• Roughly 600 investment-grade U.S. bonds under one ticker, with distributions paid monthly.
• Live since 2021 and now a multi-billion-dollar fund, and it does what its prospectus describes closely enough to rank among the stronger builds in a crowded core-bond field.

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.

• TAGG Active means drift. Sector and credit weights can sit away from the index, so returns can land on either side of the Agg.
• Straight index exposure to the same market costs less: BND, SPAB and SCHZ each charge 0.03%.
• It is a bond fund, so it moves with interest rates and carries credit risk, including possible loss of principal.troweprice.com

Full AGG profile⁠

Full TAGG profile⁠