The iShares Core US Aggregate Bond ETF (AGG) Offers Broader Diversification Than the iShares 3-7 Year Treasury Bond ETF (IEI)

2 hours ago 1

Cory Renauer, The Motley Fool

Sun, January 18, 2026 astatine 4:05 PM CST 5 min read

AGG charges a overmuch little disbursal ratio and sports a somewhat higher output than IEI
AGG is broader and much diversified, but its five-year drawdown was deeper than IEI's
Both ETFs put successful currency and U.S. authorities bonds, though AGG holds implicit 13,000 positions versus IEI's 84
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The iShares Core US Aggregate Bond ETF (NYSEMKT:AGG) stands retired for its overmuch little cost, broader diversification, and somewhat higher output compared to the iShares 3-7 Year Treasury Bond ETF (NASDAQ:IEI), though it has experienced a deeper humanities drawdown.

Both AGG and IEI are fashionable fixed-income funds from IShares, but they service antithetic purposes. AGG seeks to seizure the full U.S. investment-grade enslaved market, portion IEI focuses solely connected intermediate-term U.S. Treasury bonds. This examination looks astatine cost, performance, risk, and portfolio constitution to assistance determine which whitethorn suit an investor's needs.

Metric

IEI

AGG

Issuer	IShares	IShares
Expense ratio	0.15%	0.03%
1-yr instrumentality (as of 2026-01-09)	4.1%	4.4%
Dividend yield	3.5%	3.9%
AUM	$17.7 billion	$136.5 billion

The 1-yr instrumentality represents banal terms appreciation implicit the trailing 12 months.

AGG looks much affordable acknowledgment to its 0.03% disbursal ratio, a fraction of IEI's 0.15%, and besides offers a modestly higher output astatine 3.9% versus 3.5% for IEI.

Metric

IEI

AGG

Max drawdown (5 y)	-14.05%	-17.83%
Growth of $1,000 implicit 5 years	$903	$857

AGG is designed to screen the full U.S. investment-grade enslaved market, holding implicit 13,000 securities arsenic of its 22.3-year history. Its apical positions see Blackrock (NYSE:BLK) astatine 2.66%, and Treasury Notes that mature connected Feb. 2, 2035, astatine 0.42% of the portfolio, reflecting a blend of government, and backstage institution investments.

IEI, by contrast, focuses exclusively connected intermediate-term U.S. Treasury bonds, with 84 holdings. Its largest exposures are Treasury Note that mature connected Feb. 15, 2029, astatine 4.08%, Treasury Notes that mature connected Nov. 30, 2030, astatine 3.60%, and Treasury Notes that mature connected May 15, 2029 astatine 2.93%. Both funds debar quirks similar leverage oregon currency hedging, sticking to straightforward U.S. enslaved exposure.

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If you're looking for a predictable spot to parkland your cash, you could bash a batch worse than the iShares Core US Aggregate Bond ETF oregon the iShares 3-7 Year Treasury Bond ETF. That said, these haven't been large income investments implicit the past 5 years.