AGG vs BND: Which ETF Is Better in 2026?
Short answer
AGG (iShares Core U.S. Aggregate Bond ETF) tracks Bloomberg US Aggregate Bond Index at 0.03%; BND (Vanguard Total Bond Market Index Fund) tracks Bloomberg US Aggregate Float Adjusted Index at 0.03%. They give you different exposure, so pick by what you want to own: AGG for Bloomberg US Aggregate Bond Index, BND for Bloomberg US Aggregate Float Adjusted Index. Neither is universally better.
AGG vs BND at a glance
| 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.
What the differences actually mean
Cost. AGG charges 0.03% a year and BND charges 0.03%. On a $10,000 holding that is roughly $3 versus $3 a year. The cost is effectively identical, so fees should not decide it.
Dividend yield. AGG yields about ~3.96% and BND about ~3.94%. AGG pays more income today, which matters if you are drawing from the portfolio. If you are reinvesting for growth, total return (price plus dividends) matters more than the headline yield.
Size and liquidity. AGG holds about ~$136.5 billion versus BND's ~$394.4 billion. Both are large enough to trade with tight bid-ask spreads, so for a buy-and-hold investor the size gap rarely changes anything in practice; it mostly tells you how widely each fund is already held.
Issuer. AGG is run by iShares and BND by Vanguard. iShares (BlackRock) is the largest ETF issuer, with deep liquidity across its range. Vanguard is investor-owned and known for rock-bottom fees.
Which fits which investor
AGG (Bloomberg US Aggregate Bond Index) and BND (Bloomberg US Aggregate Float Adjusted Index) give you genuinely different exposure, so this is a choice of what you want to own, not just which is cheaper. A broad-market fund suits a core, long-horizon holding you can size large and forget. A narrower, sector, or growth-tilted fund adds concentration and usually more volatility, which suits a longer time horizon and a higher risk tolerance, and is better used as a satellite position than as your whole portfolio. AGG's higher yield leans more toward income and steadier names; the other tilts more toward growth and price appreciation.
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?
- Pick AGG if you want Bloomberg US Aggregate Bond Index exposure at 0.03%.
- Pick BND if you want Bloomberg US Aggregate Float Adjusted Index exposure at 0.03%.
- Overlap: their top holdings differ, so they can be complementary.
- Cost: 0.03% vs 0.03%, a small but compounding difference.
The bottom line: AGG vs BND
AGG (Bloomberg US Aggregate Bond Index) and BND (Bloomberg US Aggregate Float Adjusted Index) give you different exposure, so pick by what you want to own, not by which is "better". They are different enough to hold together if you want both. Walnut can show the overlap against your real portfolio before you decide.
Build a portfolio around AGG with Walnut
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% expense ratio); BND tracks Bloomberg US Aggregate Float Adjusted Index (0.03%). They track different indexes, so they give you different exposure.
Is AGG or BND cheaper?
+
AGG charges 0.03% and BND charges 0.03% as of mid-2026. Over decades the cheaper fund keeps more of your return, but verify current figures with each issuer.
Do AGG and BND hold the same stocks?
+
Their top holdings differ, so they are more complementary than redundant. Check the full holdings before assuming they are interchangeable.
Which has a higher dividend yield, AGG or BND?
+
AGG yields about ~3.96% and BND about ~3.94% (mid-2026, approximate). If income matters, that gap is one input, but total return and cost matter more for most long-term investors.
Should you own both AGG and BND?
+
It can make sense if they give you genuinely different exposure, but check the overlap first so you are not paying two fees for one bet. Walnut can show the overlap against your real portfolio.
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.