BND vs AGG: Head-to-Head Comparison

Side-by-Side Comparison

Key Differences Between BND and AGG

BND (Vanguard Total Bond Market ETF) is a u.s. intermediate-term bond fund managed by Vanguard. BND provides exposure to the entire U.S. investment-grade bond market, including government, corporate, and mortgage-backed bonds. Bonds generally provide stability and income to a portfolio, acting as a cushion when stocks decline. Beginners often add BND to their portfolio to reduce overall volatility and provide steady income, with the typical rule of thumb being to hold your age in bonds as a percentage of your portfolio.

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.

The most notable differences are in fees (0.03% vs 0.03%), number of holdings (11,286 vs 12,095), and 5-year returns (-0.50% vs -0.60%).

Holdings Overlap Analysis

BND and AGG share 100% of their top holdings. This means they are very similar funds — owning both would result in significant duplication in your portfolio. For most beginners, choosing one is sufficient.

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 $0 on a $10,000 investment. The cost difference is negligible — choose based on other factors.

Which One Should a Beginner Choose?

Choose BND if: You want conservative investors who want portfolio stability and predictable income, investors approaching or in retirement who need to reduce portfolio volatility, anyone building a balanced stock-and-bond portfolio. It's managed by Vanguard with an expense ratio of 0.03%.

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%.

Can You Own Both BND and AGG?

With 100% holdings overlap, owning both means you're essentially doubling down on the same stocks. For beginners, we recommend picking one to keep things simple. If you want more diversification, consider pairing your choice with an international ETF like VXUS or a bond ETF like BND instead.

Frequently Asked Questions