🤝 BFF Take
Nearly Identical — Your Brokerage Should Decide
BND (Vanguard) and AGG (BlackRock/iShares) are about as interchangeable as two funds can be. Both track US investment-grade bonds — BND follows the Bloomberg US Aggregate Float Adjusted Index while AGG tracks the Bloomberg US Aggregate Bond Index. Both charge 0.03% and both hold thousands of government and corporate bonds with similar duration and yield characteristics. The practical difference: BND's index uses a float-adjusted methodology (slightly reduces the weight of bonds that are harder to trade), and AGG has slightly more holdings. Neither difference is meaningful for most investors. The real decision driver is brokerage: Vanguard customers often get BND commission-free; Fidelity and Schwab customers may prefer AGG (iShares). Own whichever trades free at your broker.
📋 Quick Takeaways
💰Identical cost — both charge 0.03%/yr (~$3/yr per $10K). No fee advantage either way.
🔄Near-100% overlap — both track US investment-grade bonds with near-identical duration and yield
🎯Choose based on your brokerage: BND at Vanguard, AGG at Fidelity/Schwab/iShares platforms
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Reviewed by a CFA® Charterholder · Data updated Jun 2026 · Educational only, not financial advice
BND
Vanguard Total Bond Market ETF
AGG
iShares Core U.S. Aggregate Bond ETF
📋 BND vs AGG — Key Facts Side by Side
| Metric |
BND |
AGG |
| Fund Name |
Vanguard Total Bond Market ETF |
iShares Core U.S. Aggregate Bond ETF |
| Issuer |
Vanguard |
BlackRock |
| Tracks Index |
Bloomberg US Aggregate Float Adjusted |
Bloomberg US Aggregate Bond |
| Expense Ratio |
0.03% |
0.03% |
| Cost per $10K/yr |
$3.00 |
$3.00 |
| AUM |
$118B |
$111B |
| Holdings |
17,652 |
11,500 |
| Inception |
2007 |
2003 |
| 1-Year Return |
+3.80% |
+3.75% |
| 3-Year Return |
-2.10% |
-2.15% |
| 5-Year Return |
+0.80% |
+0.75% |
| Avg Bid-Ask Spread |
0.00% |
0.00% |
Data from ETF BFF database. Returns are annualised. Not investment advice.
📊 BND vs AGG — Annualised Returns
Annualised returns (trailing, price-based). Past performance does not guarantee future results.
🎯 Should You Buy BND or AGG?
Choose if...
BND
- You want broader diversification (17,652 holdings vs 11,500)
- You want the entire US stock market — large, mid, and small cap in one fund
Choose if...
AGG
- You want the entire US stock market — large, mid, and small cap in one fund
- You already use BlackRock and prefer staying within their fund family
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❓ BND vs AGG — Frequently Asked Questions
What is the difference between BND and AGG?
BND and AGG are nearly identical bond ETFs. Both track the US investment-grade bond market (government and corporate bonds), both charge 0.03%, and both hold thousands of bonds with similar average duration and yield. BND tracks the Bloomberg US Aggregate Float Adjusted Index (which slightly reduces the weight of less-liquid bonds) while AGG tracks the Bloomberg US Aggregate Bond Index. The practical difference is minimal — most investors can choose based on which broker offers commission-free trading.
Is BND or AGG better for income?
BND and AGG yield almost identically — both hover around 3.5–4.5% depending on current interest rates — because they hold nearly the same mix of US government and investment-grade corporate bonds. Any yield difference between the two is typically less than 0.05% per year, which is statistically negligible. For income, either ETF serves the same purpose.
Should I hold BND or AGG in my portfolio?
For most investors, it doesn't matter — pick whichever trades commission-free at your brokerage. Vanguard clients tend to prefer BND; Fidelity and Schwab clients often choose AGG. If you use both in different accounts, that's fine — the overlap is so high that it's not a meaningful doubling-up risk. More important than choosing between them is deciding what percentage of your portfolio to allocate to bonds based on your age and risk tolerance.
Are BND and AGG good investments right now?
BND and AGG are not growth investments — they're stability and income tools. When interest rates rise, bond prices fall, which is why both funds posted negative 3-year returns through 2023. When rates stabilize or fall, bonds recover and provide reliable income. Both are appropriate for investors who want to reduce portfolio volatility, generate income, or hold something that tends to rise when stocks fall. Neither should be evaluated as a "good investment right now" but rather as a portfolio allocation decision based on your goals and time horizon.
New to ETF investing? See answers to the most common ETF questions →
ℹ️ Data shown is for educational purposes and may not reflect the most current figures. Returns are trailing price-based and exclude dividend reinvestment. Past performance does not guarantee future results. ETF BFF is not a licensed financial advisor — this is not personalized financial advice.