AGG vs VPLS

AGGAiShares Core U.S. Aggregate Bond ETF

VPLSAVanguard Core-Plus 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.

VPLS Vanguard's active bond desk in an ETF wrapper. The "plus" is permission to roam past U.S. investment grade into high yield and emerging market debt, benchmarked to the broader Universal index instead of the plain Agg, for 0.20% 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.

VPLS The fund seeks total return and moderate to high current income. It invests mainly in investment-grade U.S. bonds, with selective below-investment-grade and foreign debt exposure, including emerging markets, and is actively managed.

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.

• VPLS 0.20% a year for an actively run bond book, comfortably under the 0.36% median for broad bond ETFs. Vanguard's fixed income team, at index-adjacent money.vanguard.com
• The "plus" is the point: Treasuries, agency mortgages and investment-grade credit at the core, plus room for high yield and emerging market debt the plain Agg skips.vanguard.com
• Well over a thousand bonds, so no single issuer moves the needle much, and cash goes out monthly rather than quarterly.
• Does what its prospectus says it does, and sits in the top quartile of the broad bond group.

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.

• VPLS Index Aggs like BND, SPAB and SCHZ charge 0.03%. The gap buys a human team's judgment, which can land behind the benchmark as easily as ahead.
• The high yield and emerging market sleeve carries credit risk a pure investment-grade fund does not, and those are the bonds that wobble when investors turn defensive.vanguard.com
• Moderately traded rather than a giant of the bond aisle, and it launched in 2023, so there is less history behind it than the long-running index Aggs.

Full AGG profile⁠

Full VPLS profile⁠