IGIB vs. AGG: Which iShares Bond ETF is Better?

Core Viewpoint - The bond market is expected to continue strengthening in 2025, with two specific ETFs, IGIB and AGG, providing potential investment opportunities for exposure to the U.S. investment-grade fixed-income market [1]. Cost & Size Comparison - IGIB has an expense ratio of 0.04% and AGG has a slightly lower expense ratio of 0.03% - As of January 24, 2026, IGIB's 1-year return is 4.65% while AGG's is 3.2% - IGIB offers a dividend yield of 4.58%, compared to AGG's 3.88% - The assets under management (AUM) for IGIB is $17.6 billion, while AGG has a significantly larger AUM of $136.78 billion [2][3][4]. Performance & Risk Comparison - Over the past five years, IGIB experienced a maximum drawdown of -20.64%, while AGG had a drawdown of -17.83% - The growth of a $1,000 investment over five years would result in $883 for IGIB and $857 for AGG [5]. Portfolio Composition - AGG has a 22-year track record and tracks the total U.S. investment-grade bond market with 13,067 holdings, 74% of which are AA-rated bonds [6]. - IGIB focuses on U.S. dollar-denominated investment-grade corporate bonds with maturities of 5 to 10 years, with 44.29% of its holdings in A bonds and 49.18% in BBB bonds [7]. Investment Implications - Despite IGIB's higher dividend yield, AGG pays a higher monthly dividend due to its higher price - AGG's focus on higher-rated bonds makes it a less risky investment, while IGIB carries more risk due to its lower-rated bonds but offers higher potential yields [8][9]. - The choice between these ETFs depends on whether investors prefer a high-risk/high-reward strategy or a more conservative approach [10].