ETF Comparison

AGG vs BND: Which Is the Better Pick in 2026?

A head-to-head comparison of iShares Core U.S. Aggregate Bond ETF and Vanguard Total Bond Market ETF covering yield, cost, risk, and income potential.

Data updated May 20, 2026

BlackRock

ETFs44

Total AUM$3107.6B

ETFs and AUM reflect what Dividend Vision tracks — the issuer's full lineup may be larger.

BlackRock is one of the world's largest asset managers and a major provider of ETFs across multiple investment strategies. The company's dividend-focused lineup emphasizes income-generating investments, with funds designed to deliver regular distributions to investors seeking yield. Their portfolio includes eight notable ETFs such as BALI (emerging markets income), DIVB (dividend equity), and DGRO (dividend growth), alongside complementary funds that span income, growth, and fixed-income strategies.

See our curated list of related YouTube videos on AGG.

See all BlackRock ETFs

Vanguard

ETFs48

Total AUM$11763.3B

ETFs and AUM reflect what Dividend Vision tracks — the issuer's full lineup may be larger.

Vanguard is known for offering low-cost, passively managed ETFs that serve as core portfolio holdings for individual investors. Their fund lineup emphasizes core equity exposure and dividend income strategies, with offerings spanning domestic growth (VGT, VUG), broad market indices (VOO), dividend-focused portfolios (VYM, VIG), and international high dividend yield opportunities (VONG, VYMI). The issuer's seven funds are characterized by expense ratios among the industry's lowest and a focus on long-term, buy-and-hold investors seeking diversified equity exposure.

See our curated list of related YouTube videos on BND.

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Side-by-side snapshot

	AGG	BND
Full name	iShares Core U.S. Aggregate Bond ETF	Vanguard Total Bond Market ETF
Issuer	BlackRock	Vanguard
Last Close	$98.01 as of May 20, 2026	$72.69 as of May 20, 2026
Distribution yield	4.01%	4.02%
Expense ratio	0.03%	0.03%
AUM	$135.4B	$389.7B
Distribution frequency	Monthly	Monthly
Underlying index	Bloomberg U.S. Aggregate Bond Index	Bloomberg U.S. Aggregate Float Adjusted Index
Objective	Provide exposure to the fund's underlying index or strategy per issuer materials.	Track the Bloomberg U.S. Aggregate Float Adjusted Index for broad U.S. bond exposure.
Asset class	Fixed Income	Fixed Income
Inception date	09/22/2003	04/03/2007
Beta	0.99	0.98
Last dividend	$0.33	$0.24
Ex-dividend date	05/01/2026	05/01/2026

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Key metrics

Projected income on $10K

Projections assume the current yield and share price remain constant. Actual results will vary.

Quick verdict

AGG (iShares Core U.S. Aggregate Bond ETF) and BND (Vanguard Total Bond Market ETF) are both monthly-pay dividend ETFs, but they take different approaches.

BND offers the higher yield at 4.02% vs 4.01% for AGG. A higher yield means more current income per dollar invested, though it may come with different risk characteristics.

They track different benchmarks: AGG is linked to Bloomberg U.S. Aggregate Bond Index while BND tracks Bloomberg U.S. Aggregate Float Adjusted Index, which means their performance drivers differ.

BND is the larger fund by assets ($389.7B), which generally means tighter spreads and better liquidity.

Deep dive

Yield & income

On a $10,000 investment, AGG would generate roughly $33.42/month, while BND would produce $33.50/month, at current distribution rates. Both pay monthly distributions.

AGG yield4.01%

BND yield4.02%

Monthly diff on $10K$0.08

Cost & efficiency

Over 10 years on $10,000, AGG would cost approximately $30 in fees vs $30 for BND (simplified, not compounded). Both charge the same expense ratio.

AGG ER0.03%

BND ER0.03%

Strategy & risk

AGG tracks Bloomberg U.S. Aggregate Bond Index with a bonds approach, while BND tracks Bloomberg U.S. Aggregate Float Adjusted Index using a bonds strategy. Beta is 0.99 for AGG and 0.98 for BND, indicating BND is less volatile relative to the market.

AGG beta0.99

BND beta0.98

Fund details

AGG is managed by BlackRock (launched 09/22/2003) with $135.4B in assets. BND is managed by Vanguard (launched 04/03/2007) with $389.7B in assets.

AGG AUM$135.4B

BND AUM$389.7B

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Frequently asked questions

Is AGG or BND better for dividend income?

It depends on your goals. BND currently offers the higher distribution yield, which means more income per dollar invested. However, a lower-yield fund may offer better total return or lower volatility. Consider your time horizon and risk tolerance.

What is the difference between AGG and BND?

AGG (iShares Core U.S. Aggregate Bond ETF) tracks Bloomberg U.S. Aggregate Bond Index with a bonds strategy, while BND (Vanguard Total Bond Market ETF) tracks Bloomberg U.S. Aggregate Float Adjusted Index with a bonds approach. They are issued by BlackRock and Vanguard respectively.

Can I hold both AGG and BND?

Yes. Many income investors hold both to diversify across different strategies and underlying indexes. This can reduce concentration risk while maintaining a strong income stream.

Which has lower fees, AGG or BND?

AGG and BND both charge the same expense ratio of 0.03%, so neither is cheaper on fees — pick based on yield, strategy, or underlying index instead.

How much income does $10,000 in AGG vs BND generate?

At current rates, $10,000 in AGG would generate roughly $33.42 per month ($401.00 annually). The same in BND would produce about $33.50 per month ($402.00 annually).

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AGG vs BND — at a glance

Generated April 2026 from current fund data.

Overview

AGG and BND are both broad-based U.S. bond ETFs tracking nearly identical fixed-income benchmarks with minimal fees and monthly distributions. The core distinction lies in their index construction: AGG tracks the Bloomberg U.S. Aggregate Bond Index, while BND tracks the Bloomberg U.S. Aggregate Float Adjusted Index. BND uses float-adjustment methodology, which weights bonds by their publicly available supply rather than total issuance, resulting in slightly different portfolio composition and a meaningfully larger asset base.

How they differ

The single biggest difference is index methodology. BND's float-adjusted approach excludes restricted or illiquid portions of bond issuances, leading to subtly different weightings in mortgage-backed securities, Treasuries, and corporate bonds compared to AGG. This rarely produces material performance divergence in practice—the two funds have tracked within basis points historically—but it does mean their holdings aren't identical.

Second, BND holds $387 billion in assets versus AGG's $139 billion, giving BND deeper liquidity and marginally lower trading spreads. Both charge 0.03% annually, so cost is a tie.

Third, distribution yields are nearly flat: AGG at 3.97%, BND at 4.00%. Both pay monthly, making them equally suitable for income-focused investors.

Who each is best for

AGG: Conservative investors comfortable with the original Bloomberg aggregate methodology, or those already holding AGG in existing portfolios and seeing no reason to switch. Works equally well in taxable or tax-advantaged accounts given the modest yield.

BND: Investors prioritizing maximum fund size and trading liquidity, or those philosophically aligned with Vanguard's float-adjustment philosophy. Also a natural choice if you already own other Vanguard bond holdings and prefer consolidated custody.

Key risks to know

Interest-rate risk: Both funds carry near-identical duration and will decline in NAV if rates rise. A 1% rate increase typically erodes principal by 5–7% for broad aggregate bond funds.

Credit risk: Both track investment-grade bonds, but economic deterioration could increase default rates among lower-rated corporates held in each fund's portfolio.

Reinvestment risk: In a declining-rate environment, monthly distributions will be reinvested at lower yields, pressuring total return.

Index overlap: The two indices are so similar that owning both offers minimal diversification benefit and creates unnecessary fee drag—choose one.

Bottom line

If you value the longest track record and the original aggregate index construct, AGG delivers that with $139 billion in assets. If you prefer Vanguard's structure, BND's float-adjustment methodology, or simply want the largest bond fund available, BND's $387 billion AUM and matching 4.00% yield make it the more liquid option. Neither offers a compelling advantage over the other on cost or yield; the decision hinges on custody preference and index philosophy. Past performance of these funds has been nearly identical; future results depend on rate and credit movements, not fund selection.

AI-generated analysis for educational purposes only. Verify important details independently; past performance does not guarantee future results.