IAGG vs SPY
iShares Core International Aggregate Bond ETF vs State Street SPDR S&P 500 ETF Trust
Quick Verdict
IAGG has a lower expense ratio. SPY delivered stronger 1-year returns. SPY offers more diversification with 503 holdings.
Side-by-Side Comparison
| Metric | IAGG | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.07% | 0.09% | |
| AUM | $10.9B | $789.1B | |
| Dividend Yield | 3.63% | 1.01% | |
| Holdings | 8,021 | 505 | |
| YTD Return | -0.30% | +13.75% | |
| 1Y Return | -2.42% | +22.91% | |
| 3Y Return (annualized) | +3.17% | +21.67% | |
| 5Y Return (annualized) | -0.04% | +13.32% | |
| Volatility (annualized) | 4.1% | 15.3% | |
| Max Drawdown | -13.9% | -56.5% | |
| Fund Family | iShares by BlackRock (US) | State Street Investment Management | |
| Category | Fixed Income | Equity | |
| Inception | Nov 10, 2015 | Jan 22, 1993 |
IAGG vs SPY Performance
iShares Core International Aggregate Bond ETF (IAGG) is a ETF from iShares by BlackRock (US) and State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management. Over the past year IAGG returned -2.42% while SPY returned +22.91%. Year to date, IAGG is down 0.30% versus a gain of 13.75% for SPY.
Over three years, IAGG compounded at +3.17% per year against +21.67% for SPY; over five years the annualized figures are -0.04% and +13.32% respectively. Across the full 11-year window we track, SPY has the edge at +8.85% annualized vs +2.01%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
SPY has been the more volatile fund, with annualized monthly volatility of 15.3% compared with 4.1% for IAGG. 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 -13.9% for IAGG and -56.5% for SPY. 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 0.41. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
IAGG charges 0.07% per year while SPY charges 0.09%. On a $10,000 position that is $7 vs $9 annually, a gap of $2 per year that compounds over a long holding period. On income, IAGG currently yields 3.63% against 1.01% for SPY.
Holdings Overlap
IAGG and SPY share 0 holdings out of 887 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, IAGG or SPY?
IAGG has an expense ratio of 0.07% while SPY charges 0.09%. IAGG is the cheaper option. On a $10,000 investment, that is $2 per year of difference.
Which performed better, IAGG or SPY?
Over the past year IAGG returned -2.42% vs +22.91% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (11 years), IAGG annualized +2.01% vs +8.85% for SPY. Past performance does not guarantee future results.
Which is riskier, IAGG or SPY?
SPY has been the more volatile fund at 15.3% annualized versus 4.1% for IAGG. Worst drawdown: IAGG -13.9% vs SPY -56.5%.
Should I hold both IAGG and SPY?
IAGG and SPY have a monthly-return correlation of 0.41, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between IAGG and SPY?
IAGG and SPY share 0 common holdings with a 0.0% weight overlap. Combined, they hold 887 unique securities.
Which pays a higher dividend, IAGG or SPY?
IAGG yields 3.63% while SPY yields 1.01%, so IAGG currently pays the higher dividend yield.
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