AGG vs BND: Which ETF Is Better in 2026?
Last updated mid-2026
Short answer
AGG and BND both track Bloomberg US Aggregate Bond Index, so you are buying essentially the same portfolio. This is a cost decision, not a “which is better” one: the fees are identical (0.03%), so it comes down to issuer and share price. Comparing their past returns is measuring tracking noise, not skill.
The tie-breaker: cost and liquidity
Fee (this is the whole decision). AGG charges 0.03% and BND charges 0.03%. On a $10,000 holding that is about $3 vs $3 a year. The cost is identical, so this really comes down to issuer preference and share price.
Liquidity (only if you trade). AGG holds about ~$136.5 billion and BND about ~$394.4 billion. For buy-and-hold this changes nothing; if you trade options or in size, the larger, more liquid fund gives tighter spreads.
No performance table, on purpose. Two funds tracking Bloomberg US Aggregate Bond Index deliver essentially the same return. Any past-performance gap between them is tracking noise, not manager skill, and comparing it would mislead more than it informs.
What each fund tracks: index and methodology
AGG tracks Bloomberg US Aggregate Bond Index, and BND tracks Bloomberg US Aggregate Float Adjusted Index. Because both funds follow the same benchmark, their constituent lists and weights are essentially identical, so what you own barely changes between them. The decision is about cost, structure, and issuer, not exposure.
On construction, AGG is market-cap-weighted and BND is market-cap-weighted. They share a weighting approach, so any difference comes from the underlying index rather than the method.
In practice, tracking the same index means the two are interchangeable exposure; a past-return gap between them reflects tracking differences and fees, not a difference in what the fund is designed to hold.
AGG vs BND: cost, size, and yield side by side
| AGG | BND | |
|---|---|---|
| Expense ratio | 0.03% | 0.03% |
| Fee per $10,000 / year | $3 | $3 |
| Assets under management | ~$136.5 billion | ~$394.4 billion |
| Dividend yield | ~3.96% | ~3.94% |
| Inception | September 2003 | April 2007 |
The fees match exactly at 0.03%, so cost is not the deciding factor here; the difference, if any, comes from exposure and structure.
On scale, AGG holds about ~$136.5 billion and BND about ~$394.4 billion. Larger funds generally trade at tighter bid-ask spreads and carry deeper options markets, which matters if you trade actively or in size; for buy-and-hold investors it rarely changes the outcome. AGG currently pays the higher dividend yield (~3.96% versus ~3.94%), which shifts more of its return into cash today.
Which fund suits which investor
Since AGG and BND track Bloomberg US Aggregate Bond Index, the same investor is well served by either. A cost-focused buy-and-hold investor should lean to whichever is cheaper to trade at their broker (the fees are identical), while an active trader who uses options or trades in size may prefer the larger, more liquid of the two for tighter spreads.
These are descriptive profiles, not recommendations. What fits you depends on your goals, horizon, and what you already own. Walnut is not an investment adviser.
Before you buy: do you already own this?
The overlap that decides most ETF purchases is not between AGG and BND, it is with what you already hold. ETF redundancy is invisible without looking through to the underlying holdings: you can already own most of AGG inside a broad fund like an S&P 500 or total-market ETF and not realize it.
This is the part a generic comparison cannot answer, because it depends on your account. Connect your brokerage and Walnut looks through your funds to show your real, combined exposure, flags how much of AGG or BND you already own elsewhere, and tells you whether adding either just buys the same companies twice, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.
What is AGG?
Tracks the Bloomberg US Aggregate, the standard investment-grade bond benchmark spanning Treasuries, agency mortgage-backed, and corporate bonds. Functionally very similar to BND at the same 0.03% fee; the choice is iShares versus Vanguard as an ecosystem.
What is BND?
Holds thousands of US investment-grade bonds (Treasuries, agency, and corporate) across maturities, making it a one-fund core bond allocation. It adds ballast and income to an equity portfolio at a 0.03% fee, with price sensitivity to interest rates.
AGG or BND: which should you pick?
AGG vs BND: the full fund facts
| AGG | BND | |
|---|---|---|
| Fund | iShares Core U.S. Aggregate Bond ETF | Vanguard Total Bond Market Index Fund |
| Tracks | Bloomberg US Aggregate Bond Index | Bloomberg US Aggregate Float Adjusted Index |
| Expense ratio | 0.03% | 0.03% |
| Dividend yield | ~3.96% | ~3.94% |
| AUM | ~$136.5 billion | ~$394.4 billion |
| Top holding | n/a | n/a |
| Issuer | iShares | Vanguard |
Approximate as of mid-2026; verify with each issuer.
iShares (BlackRock) is the largest ETF issuer, with deep liquidity across its range. Vanguard is investor-owned and known for rock-bottom fees.
The bottom line: AGG vs BND
AGG and BND track the same index, so this is cost and issuer, not what you own: the fees match, so take either. Either way, the decisive check is overlap with your real portfolio. Walnut can show that before you buy. It is not an investment adviser.
Wondering how AGG or BND fits the portfolio you already own? Walnut is an AI investing app that connects your brokerage read-only and answers questions like that about your actual holdings: overlap, concentration, and how each position tracks the S&P 500. Compare the best AI portfolio analyzers or see the best AI investing apps in 2026.
Investing in AGG with AI
Walnut connects your real brokerage so you can see how AGG and BND overlap with what you already own, analyze either by chatting through Claude or ChatGPT, and place any trade yourself.
FAQ
What is the difference between AGG and BND?
+
AGG tracks Bloomberg US Aggregate Bond Index (0.03%); BND tracks Bloomberg US Aggregate Float Adjusted Index (0.03%). They track the same index, so the differences are cost, issuer, and structure, not what you own.
Do AGG and BND hold the same stocks?
+
Their holdings are different in kind (for example bonds or commodities versus stocks), so they are complementary rather than redundant.
Is AGG or BND cheaper?
+
AGG charges 0.03% and BND charges 0.03% as of mid-2026, so cost is a wash. On a $10,000 holding that is about $3 vs $3 a year.
Should you own both AGG and BND?
+
Rarely. They track the same index, so holding both just pays two fees for one exposure; pick the cheaper or more liquid one. Walnut can show the real overlap, and the overlap with what you already own, before you buy.
Which has a higher dividend yield, AGG or BND?
+
AGG yields about ~3.96% and BND about ~3.94% (mid-2026, approximate). AGG pays more today. For most long-term investors total return and cost matter more than the headline yield.
How much do AGG and BND overlap?
+
AGG and BND hold different kinds of assets, so their overlap is minimal and they are complementary rather than redundant.
AGG vs BND: which is better?
+
Neither is "better" in exposure terms because both track Bloomberg US Aggregate Bond Index. The tie-breaker is cost and liquidity, so either works and issuer preference decides. Walnut is not an investment adviser.
Which is better for a long-term investor, AGG or BND?
+
For buy-and-hold, cost compounds, so the cheaper fund (the fees match here) is the usual long-term choice; the more liquid one only matters if you trade actively. Figures are approximate as of mid-2026.
Related comparisons
Browse all ETF comparisons.
Walnut is informational, not investment advice. ETF figures are approximations stamped to mid-2026; verify current data with each issuer before deciding. Nothing here is a recommendation.