ETF Comparison

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

A head-to-head comparison of iShares Core U.S. Aggregate Bond ETF and Vanguard Intermediate-Term 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.

See all iShares ETFs

Vanguard

ETFs115

Total AUM$4484B

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 emphasize broad market exposure and long-term investing. The company operates 175 ETFs across diverse fund families including Index, Bond, Equity, Dividend, Income, International, Factor, and ESG strategies, serving investors with various goals from core portfolio building to specialized income generation. Notable for its scale and popular tickers like VB (total U.S. small-cap), BND (total bond market), and VBIAX (international bonds), Vanguard focuses on providing comprehensive, index-based investment solutions with an emphasis on cost efficiency and accessibility.

See our curated list of related YouTube videos on VCIT.

See all Vanguard ETFs

Side-by-side snapshot

	AGG	VCIT
Full name	iShares Core U.S. Aggregate Bond ETF	Vanguard Intermediate-Term Corporate Bond ETF
Issuer	iShares	Vanguard
Last Close	$98.61 as of July 4, 2026	$82.34 as of July 4, 2026
Distribution yield	4.02%	4.84%
Distribution Safety Score	96	97
Expense ratio	0.03%	0.04%
AUM	$136B	$66.2B
Distribution frequency	Monthly	Monthly
Underlying index	Bloomberg U.S. Aggregate Bond Index	USD investment-grade intermediate-term corporate bonds
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	11/19/2009
Beta	0.99	1.07
Last dividend	$0.3307	$0.3320
Ex-dividend date	08/03/2026	07/01/2026

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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 lagged VCIT over the trailing twelve months, posting a 3.50% total return against 4.13%. The lead holds up over 10 years too: VCIT has compounded at 2.76% a year, against 1.44% for AGG. Figures are total returns: price change plus every distribution reinvested.

Symbol	YTD	1Y	3Y	5Y	10Y	Since Nov 2009	Volatility	Sharpe	Sortino	Max drawdown
AGG	0.40%	3.50%	4.08%	0.02%	1.44%	2.44%	5.4%	-0.09	-0.12	-6.1%
VCIT	0.29%	4.13%	6.09%	1.09%	2.76%	4.28%	5.6%	0.26	0.36	-6.1%

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 Nov 2009” measures every fund from November 23, 2009 — 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 VCIT (Vanguard Intermediate-Term Corporate Bond ETF) are both monthly-pay dividend ETFs, but they take different approaches.

VCIT offers the higher yield at 4.84% 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 0.04%.

They track different benchmarks: AGG is linked to Bloomberg U.S. Aggregate Bond Index while VCIT tracks USD investment-grade intermediate-term corporate bonds, 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 VCIT would produce $40.33/month, at current distribution rates. Both pay monthly distributions.

AGG yield4.02%

VCIT yield4.84%

Monthly diff on $10K$6.83

Cost & efficiency

Over 10 years on $10,000, AGG would cost approximately $30 in fees vs $40 for VCIT (simplified, not compounded). The $10.00 difference may be offset by yield or performance.

AGG ER0.03%

VCIT ER0.04%

Strategy & risk

AGG tracks Bloomberg U.S. Aggregate Bond Index with a bonds approach, while VCIT tracks USD investment-grade intermediate-term corporate bonds with a bonds approach. Beta is 0.99 for AGG and 1.07 for VCIT, indicating AGG is less volatile relative to the market.

AGG beta0.99

VCIT beta1.07

Fund details

AGG is managed by iShares (launched 09/22/2003) with $136B in assets. VCIT is managed by Vanguard (launched 11/19/2009) with $66.2B in assets.

AGG AUM$136B

VCIT AUM$66.2B

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Frequently asked questions

Is AGG or VCIT better for dividend income?

It depends on your goals. VCIT 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 VCIT?

AGG (iShares Core U.S. Aggregate Bond ETF) tracks Bloomberg U.S. Aggregate Bond Index with a bonds approach, while VCIT (Vanguard Intermediate-Term Corporate Bond ETF) tracks USD investment-grade intermediate-term corporate bonds with a bonds approach. They are issued by iShares and Vanguard respectively.

Can I hold both AGG and VCIT?

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 VCIT?

AGG has an expense ratio of 0.03% while VCIT charges 0.04%. Lower fees mean more of your investment returns stay in your pocket over time.

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

At current rates, $10,000 in AGG would generate roughly $33.50 per month ($402.00 annually). The same in VCIT would produce about $40.33 per month ($484.00 annually).

Which has performed better historically, AGG or VCIT?

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AGG vs VCIT — at a glance

Generated June 2026 from current fund data.

Overview

AGG and VCIT are both monthly-paying bond ETFs targeting investment-grade fixed income, but they track fundamentally different universes. AGG tracks the broad Bloomberg U.S. Aggregate Bond Index—a mix of government, corporate, mortgage-backed, and agency securities—while VCIT focuses exclusively on intermediate-term investment-grade corporate bonds. That difference in scope drives their yield and duration profiles.

How they differ

AGG's broad-market mandate means roughly 40% of its holdings are government and agency debt, with the remainder split among corporates and mortgage-backed securities. VCIT, by contrast, holds only corporate bonds with intermediate maturity, making it a more concentrated play on corporate credit quality and duration. The yield spread reflects this: VCIT distributes 4.94% versus AGG's 4.00%, a 94-basis-point difference rooted in VCIT's tighter credit focus. AGG's expense ratio is marginally lower at 0.03% versus VCIT's 0.04%, though both are extremely cheap. AGG's $136B in AUM dwarfs VCIT's $66.2B, meaning AGG offers deeper liquidity and tighter bid-ask spreads in most market conditions.

Who each is best for

AGG: Fits investors seeking a core fixed-income anchor with minimal credit risk, since government and agency holdings cushion downturns; suits those building a total-bond-market sleeve without sector tilts.

VCIT: Designed for investors willing to accept corporate credit exposure in exchange for higher yield; works for allocations that already have government-bond exposure elsewhere and want to harvest the corporate-credit premium.

Key risks to know

Credit spread widening. VCIT's all-corporate mandate means its NAV is more sensitive to moves in investment-grade credit spreads. In a recession or credit-stress event, corporates typically underperform governments—where AGG derives meaningful ballast.

Duration and interest-rate sensitivity. VCIT's intermediate-term focus and higher beta (1.07 vs. AGG's 0.99) signal greater price sensitivity to rising or falling rates. A 1% rate move would likely hit VCIT harder than AGG.

Mortgage-backed security volatility. AGG's ~20% allocation to mortgage-backed securities introduces extension and prepayment risk absent from VCIT; rising rates can lock investors into lower yields if homeowners stop refinancing, while falling rates can accelerate payoffs.

Sector concentration. VCIT's single-sector focus means it carries no diversification benefit from swaps in the relative value between government bonds, corporates, and securitized credit.

Bottom line

AGG is a broad, low-volatility fixed-income foundation with government ballast and rock-bottom fees; VCIT trades yield visibility for credit risk and higher duration sensitivity. If you want core stability and minimal downside, AGG's diversification and government exposure stand out; if you're comfortable with corporate credit and already hold government bonds elsewhere, VCIT's 94-basis-point yield edge merits consideration. Past performance does not predict future results.

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