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 4, 2026

iShares

ETFs481

Total AUM$4451B

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.

See our curated list of related YouTube videos on AGG and LQD.

See all iShares ETFs

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	$98.61 as of July 4, 2026	$108.64 as of July 4, 2026
Distribution yield	4.02%	4.21%
Distribution Safety Score	96	96
Expense ratio	0.03%	0.14%
AUM	$136B	$29.2B
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	1.33
Last dividend	$0.3307	$0.3815
Ex-dividend date	08/03/2026	08/03/2026

Income calculator

See how much monthly income a hypothetical investment would generate in each ETF at current yields.

Want to go deeper?

Add these ETFs to a sample portfolio and forecast your dividend income over 5+ years — no signup required.

Build a sample portfolio Forecast income

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 3.50% total return against 3.17%. The picture flips over 10 years, though — LQD has compounded at 2.23% a year, ahead of AGG at 1.44%. AGG has been the steadier holding, though — annualized volatility of 5.4% 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	0.40%	3.50%	4.08%	0.02%	1.44%	3.06%	5.4%	-0.09	-0.12	-6.1%
LQD	0.12%	3.17%	4.66%	-0.44%	2.23%	4.08%	7.3%	0.01	0.02	-8.4%

Total return with all distributions reinvested on the ex-dividend date, split-adjusted, as of July 2, 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 4.21% vs 4.02% 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 ($136B), which generally means tighter spreads and better liquidity.

Deep dive

Yield & income

On a $10,000 investment, AGG would generate roughly $33.50/month, while LQD would produce $35.08/month, at current distribution rates. Both pay monthly distributions.

AGG yield4.02%

LQD yield4.21%

Monthly diff on $10K$1.58

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 1.33 for LQD, indicating AGG is less volatile relative to the market.

AGG beta0.99

LQD beta1.33

Fund details

AGG is managed by iShares (launched 09/22/2003) with $136B in assets. LQD is managed by iShares (launched 07/22/2002) with $29.2B in assets.

AGG AUM$136B

LQD AUM$29.2B

Ready to act?

Open in Comparator Model in portfolio See pricing

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. 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 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 $33.50 per month ($402.00 annually). The same in LQD would produce about $35.08 per month ($421.00 annually).

Which has performed better historically, AGG or LQD?

More comparisons to explore

People also compare AGG with

People also compare LQD with

Popular comparisons

AGG vs LQD — at a glance

Generated June 2026 from current fund data.

Overview

AGG and LQD are both broad bond ETFs from iShares, but they track different universes of the U.S. fixed-income market. AGG holds the full U.S. aggregate bond market—Treasuries, investment-grade corporates, and mortgage-backed securities—while LQD focuses exclusively on investment-grade corporate bonds. The yield difference reflects that tighter corporate credit exposure.

How they differ

AGG and LQD's core distinction is scope: AGG's Bloomberg U.S. Aggregate index spans government, corporate, and securitized debt, while LQD's Markit iBoxx index holds only investment-grade corporate bonds. That's why LQD yields 4.53% versus AGG's 4.00%—corporates pay more than Treasuries. LQD also carries higher beta (1.33 vs. 0.99), meaning it swings more sharply when rates move or credit spreads widen. AGG's $136B in AUM dwarfs LQD's $29.2B, and AGG's expense ratio (0.03%) is roughly one-fifth of LQD's (0.14%), though both are cheap in absolute terms.

Who each is best for

AGG: Fits investors seeking a market-weight bond foundation with minimal rate or credit risk relative to the broad market. The monthly distribution and low cost suit long-duration income portfolios where diversification across bond types is a priority.

LQD: Fits investors comfortable tilting toward corporate credit and willing to accept higher volatility in exchange for yield pickup. Useful for allocations where the investor believes credit spreads offer value or prefers corporate-only exposure over government bonds.

Key risks to know

Interest rate risk: LQD's higher beta means its NAV falls more sharply when yields rise. A 1% rate increase would pressure LQD more than AGG, though both face directional rate risk.

Credit spread risk: LQD holds no Treasuries or mortgage-backed securities to cushion when corporate spreads widen. In a credit event or recession, LQD could lag AGG by several percentage points.

Concentration in corporates: LQD's focus on a single credit segment creates hidden correlation risk; diversification across issuer quality is tighter than AGG's mix of government, agency, and corporate debt.

Expense drag over time: LQD's 0.14% ratio costs roughly $14 annually per $10,000 invested versus AGG's $3—a small difference yearly but meaningful over decades.

Bottom line

If you want broad market bond exposure with minimal cost and maximum diversification, AGG's all-inclusive approach stands out. If you're targeting corporate credit specifically and willing to tolerate higher rate sensitivity in exchange for extra yield, LQD offers that tighter focus. Past performance does not guarantee future returns; credit conditions and Fed policy will shape both funds' behavior going forward.

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