AGG vs TLT: Head-to-Head Comparison

Side-by-Side Comparison

Key Differences Between AGG and TLT

AGG (iShares Core U.S. Aggregate Bond ETF) is a u.s. intermediate-term bond fund managed by BlackRock. AGG is BlackRock's version of a total U.S. bond market ETF, tracking the Bloomberg U.S. Aggregate Bond Index. It covers a similar universe of bonds as Vanguard's BND, including treasuries, corporates, and mortgage-backed securities. Beginners will find that AGG and BND are nearly interchangeable, with the main differences being minor variations in expense ratio and the index methodology used.

TLT (iShares 20+ Year Treasury Bond ETF) is a long-term u.s. treasury fund managed by BlackRock. TLT invests in U.S. Treasury bonds with maturities of 20 years or more, making it highly sensitive to changes in long-term interest rates. When rates fall, TLT can deliver stock-like returns, but when rates rise, it can suffer significant losses. Beginners should understand that TLT is much more volatile than short-term bond funds, but it can serve as powerful portfolio insurance during stock market crashes.

The most notable differences are in fees (0.03% vs 0.15%), number of holdings (12,095 vs 42), and 5-year returns (-0.60% vs -5.20%).

Holdings Overlap Analysis

AGG and TLT share only 0% of their top holdings. These funds are quite different, making them complementary choices if you want broader market coverage.

Cost Comparison Over Time

If you invest $10,000 and hold for 20 years (assuming 8% annual returns):

Over 20 years, the fee difference amounts to $1,020 on a $10,000 investment. AGG saves you more in fees over time.

Which One Should a Beginner Choose?

Choose AGG if: You want investors who prefer blackrock/ishares as their etf provider, 401(k) participants looking for a core bond holding, conservative investors building a balanced portfolio with stock and bond allocations. It's managed by BlackRock with an expense ratio of 0.03%.

Choose TLT if: You want investors who believe interest rates will decline and want to profit from falling yields, those seeking portfolio insurance that tends to rise sharply during equity market panics, tactical investors using long-duration treasuries to express a view on interest rate direction. It's managed by BlackRock with an expense ratio of 0.15%.

Can You Own Both AGG and TLT?

Absolutely! With only 0% overlap, AGG and TLT complement each other well. A simple portfolio might allocate 60% to one and 40% to the other, or you could pair them with a bond ETF like BND for a complete three-fund portfolio.

Frequently Asked Questions