ETF Comparison

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

A head-to-head comparison of iShares Core U.S. Aggregate Bond ETF and iShares iBoxx $ Investment Grade Corporate Bond ETF covering yield, cost, risk, and income potential.

Data updated July 21, 2026

iShares

ETFs477

Total AUM$4543B

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

iShares is one of the largest ETF providers globally, known for offering a broad, diversified lineup of exchange-traded funds across multiple asset classes and investment strategies. The company operates 215 funds spanning 15 distinct families, including popular offerings in dividend income, covered call strategies, bonds, equities, ESG-focused investments, and factor-based approaches, with widely-held tickers like AGG (bond), ACWI (global equity), and AOA (allocation). iShares is characterized by its comprehensive fund ecosystem that serves both core portfolio holdings and specialized investment strategies, making it a prominent player for investors seeking both traditional and alternative income-generating ETF solutions.

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Side-by-side snapshot

	AGG	LQD
Full name	iShares Core U.S. Aggregate Bond ETF	iShares iBoxx $ Investment Grade Corporate Bond ETF
Issuer	iShares	iShares
Last Close	$97.95 as of July 21, 2026	$107.15 as of July 21, 2026
Distribution yield	4.05%	4.27%
Distribution Safety Score™	96	96
Expense ratio	0.03%	0.14%
AUM	$139B	$35.3B
Distribution frequency	Monthly	Monthly
Underlying index	Bloomberg U.S. Aggregate Bond Index	Markit iBoxx USD Liquid Investment Grade Index
Objective	Provide exposure to the fund's underlying index or strategy per issuer materials.	Provide exposure to the fund's underlying index or strategy per issuer materials.
Asset class	Fixed Income	Fixed Income
Inception date	09/22/2003	07/22/2002
Beta	0.99	1.34
Last dividend	$0.3307	$0.3815
Ex-dividend date	07/01/2026	07/01/2026

Bottom lineAGG and LQD are nearly interchangeable — both offer very similar bond exposure with very similar cost and risk. The clearest tie-breaker is cost: AGG is cheaper at 0.03% vs 0.14%.

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Visual comparison

Key metrics

Projected income on $10K

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

Total returns

AGG has outpaced LQD over the trailing twelve months, posting a 3.58% total return against 3.10%. The picture flips over 10 years, though — LQD has compounded at 2.14% a year, ahead of AGG at 1.42%. AGG has been the steadier holding, though — annualized volatility of 5.3% against 7.3% for LQD. Figures are total returns: price change plus every distribution reinvested.

Symbol	YTD	1Y	3Y	5Y	10Y	Since Sep 2003	Volatility	Sharpe	Sortino	Max drawdown
AGG	0.06%	3.58%	3.84%	-0.29%	1.42%	3.04%	5.3%	-0.13	-0.18	-5.7%
LQD	-0.53%	3.10%	4.34%	-0.85%	2.14%	4.04%	7.3%	-0.03	-0.04	-8.1%

Total return with all distributions reinvested on the ex-dividend date, split-adjusted, as of July 20, 2026. YTD and 1Y are cumulative; longer windows are annualized. “Since Sep 2003” measures every fund from September 26, 2003 — the youngest fund's first trading day — so all funds share one comparison window. Volatility is the annualized standard deviation of daily total returns over the trailing 3 years. Sharpe and Sortino divide the annualized return in excess of the risk-free rate by, respectively, that volatility and the downside deviation (both over the trailing 3 years) — higher is better. Max drawdown is the largest peak-to-trough total-return decline over the same window — shallower is better.

Quick verdict

AGG (iShares Core U.S. Aggregate Bond ETF) and LQD (iShares iBoxx $ Investment Grade Corporate Bond ETF) are both monthly-pay dividend ETFs, but they take different approaches.

LQD offers the higher yield at 4.27% vs 4.05% for AGG. A higher yield means more current income per dollar invested, though it may come with different risk characteristics.

AGG is cheaper with an expense ratio of 0.03% compared to 0.14%.

They track different benchmarks: AGG is linked to Bloomberg U.S. Aggregate Bond Index while LQD tracks Markit iBoxx USD Liquid Investment Grade Index, which means their performance drivers differ.

AGG is the larger fund by assets ($139B), which generally means tighter spreads and better liquidity.

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Deep dive

Yield & income

On a $10,000 investment, AGG would generate roughly $33.75/month, while LQD would produce $35.58/month, at current distribution rates. Both pay monthly distributions.

AGG yield4.05%

LQD yield4.27%

Monthly diff on $10K$1.83

Cost & efficiency

Over 10 years on $10,000, AGG would cost approximately $30 in fees vs $140 for LQD (simplified, not compounded). The $110.00 difference may be offset by yield or performance.

AGG ER0.03%

LQD ER0.14%

Strategy & risk

AGG tracks Bloomberg U.S. Aggregate Bond Index with a bonds approach, while LQD tracks Markit iBoxx USD Liquid Investment Grade Index with a bonds approach. Beta is 0.99 for AGG and 1.34 for LQD, indicating AGG is less volatile relative to the market.

AGG beta0.99

LQD beta1.34

Fund details

AGG is managed by iShares (launched 09/22/2003) with $139B in assets. LQD is managed by iShares (launched 07/22/2002) with $35.3B in assets.

AGG AUM$139B

LQD AUM$35.3B

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Frequently asked questions

Is AGG or LQD better for dividend income?

It depends on your goals. LQD 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 LQD?

AGG (iShares Core U.S. Aggregate Bond ETF) tracks Bloomberg U.S. Aggregate Bond Index with a bonds approach, while LQD (iShares iBoxx $ Investment Grade Corporate Bond ETF) tracks Markit iBoxx USD Liquid Investment Grade Index with a bonds approach. They are issued by iShares and iShares respectively.

Can I hold both AGG and LQD?

Yes — nothing prevents holding both. Whether the combination actually diversifies depends on how much the underlying exposures overlap, which isn't fully measurable from the data on this page; review each security's holdings, sector, and strategy before treating them as complementary.

Which has lower fees, AGG or LQD?

AGG has an expense ratio of 0.03% while LQD charges 0.14%. Lower fees mean more of your investment returns stay in your pocket over time.

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

At current rates, $10,000 in AGG would generate roughly $33.75 per month ($405.00 annually). The same in LQD would produce about $35.58 per month ($427.00 annually).

Which has performed better historically, AGG or LQD?

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AGG vs LQD — at a glance

Generated July 2026 from current fund data.

Overview

AGG and LQD are both investment-grade bond ETFs issued by iShares, but they target different segments of the fixed-income market. AGG tracks the broad Bloomberg U.S. Aggregate Bond Index, which includes Treasuries, investment-grade corporates, mortgage-backed securities, and asset-backed securities. LQD focuses exclusively on the iBoxx USD Liquid Investment Grade Index, a narrower universe of investment-grade corporate bonds.

How they differ

The biggest difference is scope: AGG holds the entire U.S. investment-grade bond market, while LQD holds only corporate bonds. This makes AGG a true core fixed-income holding and LQD a focused bet on corporate credit. AGG's 4.05% distribution rate versus LQD's 4.26% reflects this—LQD's higher yield comes from excluding lower-yielding government and mortgage debt. On cost and scale, AGG dominates: at $136B in AUM and a 0.03% expense ratio, it undercuts LQD's $29.2B and 0.14% ratio. Finally, LQD carries higher interest-rate sensitivity, with a beta of 1.34 compared to AGG's 0.99, meaning it will amplify moves in the broader bond market.

Who each is best for

AGG: Fits investors seeking a diversified, low-cost foundation for fixed-income exposure across all major U.S. investment-grade segments, including government and mortgage-backed securities.

LQD: Fits investors who want to isolate corporate bond credit risk and are willing to accept higher sensitivity to rate moves in exchange for a tighter yield advantage over Treasuries.

Key risks to know

Credit spread widening: LQD's exclusive focus on corporate bonds means it bears full credit-spread risk if corporate borrowers face deteriorating fundamentals. A widening of investment-grade spreads will hurt LQD more than AGG, which is buffered by Treasury and mortgage holdings.

Interest-rate sensitivity mismatch: LQD's beta of 1.34 versus AGG's 0.99 indicates material additional duration risk in rising-rate environments. When yields climb, LQD's price will fall harder.

Liquidity concentration in LQD's index: The Markit iBoxx index emphasizes "liquid" credits, which may mean reduced diversification within the corporate universe. AGG's broader mix, including less-liquid mortgage-backed and asset-backed securities, carries different liquidity dynamics.

Overlapping holdings and performance correlation: Both funds hold investment-grade corporates, so their price movements may be correlated during stress—diversification benefits between them are limited.

Bottom line

If you want a simple, low-cost core bond position that spans Treasuries, corporates, and mortgages, AGG stands out with its $136B scale and 0.03% expense ratio. If you're targeting corporate credit specifically and willing to accept higher interest-rate sensitivity for a modest yield pickup, LQD offers a focused alternative. Past performance doesn't predict future results; both funds' returns depend on the direction of rates and the health of corporate credit at the time you invest.

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

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