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

Core Insights - The iShares Core US Aggregate Bond ETF (AGG) offers lower costs, broader diversification, and slightly higher yield compared to the iShares 3-7 Year Treasury Bond ETF (IEI), despite a deeper historical drawdown [1][2] Cost and Size Comparison - AGG has an expense ratio of 0.03%, significantly lower than IEI's 0.15% - The one-year return for AGG is 4.4%, compared to IEI's 4.1% - AGG's dividend yield is 3.9%, while IEI's is 3.5% - Assets under management (AUM) for AGG is $136.5 billion, compared to IEI's $17.7 billion [3] Performance and Risk Comparison - The maximum drawdown over five years for IEI is -14.05%, while AGG's is -17.83% - Growth of $1,000 over five years would result in $903 for IEI and $857 for AGG [4] Portfolio Composition - AGG covers the total U.S. investment-grade bond market with over 13,000 securities, including significant positions in Blackrock and various Treasury Notes [5] - IEI focuses exclusively on intermediate-term U.S. Treasury bonds with 84 holdings, featuring notable exposures to specific Treasury Notes maturing in 2029 and 2030 [6] Investment Outlook - Both AGG and IEI have underperformed as income investments over the past five years, with AGG down by 0.7% and IEI yielding a mere 0.96% gain for investors who bought in early 2021 [7][8] - Future returns could improve if the Federal Reserve lowers interest rates [8]