AGG vs IEF

Quick Verdict

AGG has a lower expense ratio. AGG delivered stronger 1-year returns. AGG offers more diversification with 1959 holdings.

Lower Fees: AGGHigher Returns: AGGMore Diversified: AGG

Side-by-Side Comparison

MetricAGGIEFWinner
Expense Ratio0.03%0.15%
AUM$137.7B$47.3B
Dividend Yield3.97%3.88%
Holdings13,26915
YTD Return-0.30%-1.13%
1Y Return+2.08%+0.94%
3Y Return (annualized)+3.98%+3.28%
5Y Return (annualized)-0.23%-1.36%
Volatility (annualized)4.4%6.6%
Max Drawdown-18.4%-23.9%
Fund FamilyiShares by BlackRock (US)iShares by BlackRock (US)
CategoryFixed IncomeFixed Income
InceptionSep 22, 2003Jul 22, 2002

AGG vs IEF Performance

iShares Core US Aggregate Bond ETF (AGG) is a ETF from iShares by BlackRock (US) and iShares 7-10 Year Treasury Bond ETF (IEF) is a ETF from iShares by BlackRock (US). Over the past year AGG returned +2.08% while IEF returned +0.94%. Year to date, AGG is down 0.30% versus a loss of 1.13% for IEF.

Over three years, AGG compounded at +3.98% per year against +3.28% for IEF; over five years the annualized figures are -0.23% and -1.36% respectively. Across the full 23-year window we track, IEF has the edge at +3.35% annualized vs +3.01%. Past performance does not guarantee future results.

Risk: Volatility and Drawdowns

IEF has been the more volatile fund, with annualized monthly volatility of 6.6% compared with 4.4% for AGG. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.

The deepest peak-to-trough decline in our data was -18.4% for AGG and -23.9% for IEF. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.

The two funds' monthly returns correlate at 0.89. They usually move together, but the gap leaves some room for diversification.

Fees and Cost Over Time

AGG charges 0.03% per year while IEF charges 0.15%. On a $10,000 position that is $3 vs $15 annually, a gap of $12 per year that compounds over a long holding period. On income, AGG currently yields 3.97% against 3.88% for IEF.

Holdings Overlap

0.0%overlap

AGG and IEF share 0 holdings out of 1971 unique holdings combined, representing a 0.0% weight overlap.

Moderate overlap means holding both could provide meaningful diversification benefits.

Frequently Asked Questions

Which is cheaper, AGG or IEF?

AGG has an expense ratio of 0.03% while IEF charges 0.15%. AGG is the cheaper option. On a $10,000 investment, that is $12 per year of difference.

Which performed better, AGG or IEF?

Over the past year AGG returned +2.08% vs +0.94% for IEF, so AGG leads on 1-year performance. Over the longest common window we track (23 years), AGG annualized +3.01% vs +3.35% for IEF. Past performance does not guarantee future results.

Which is riskier, AGG or IEF?

IEF has been the more volatile fund at 6.6% annualized versus 4.4% for AGG. Worst drawdown: AGG -18.4% vs IEF -23.9%.

Should I hold both AGG and IEF?

AGG and IEF have a monthly-return correlation of 0.89, so combining them can provide real diversification depending on your allocation goals.

What is the holdings overlap between AGG and IEF?

AGG and IEF share 0 common holdings with a 0.0% weight overlap. Combined, they hold 1971 unique securities.

Which pays a higher dividend, AGG or IEF?

AGG yields 3.97% while IEF yields 3.88%, so AGG currently pays the higher dividend yield.

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