AGG vs. IEF
AGG (iShares Core U.S. Aggregate Bond ETF) and IEF (iShares 7-10 Year Treasury Bond ETF) are both exchange-traded funds - AGG is a Total Bond Market fund tracking the Bloomberg U.S. Aggregate Bond Index, while IEF is a Government Bonds fund tracking the ICE U.S. Treasury 7-10 Year Bond Index. Both are passively managed. Over the past 10 years, AGG returned 1.58%/yr vs 0.60%/yr for IEF. Their correlation of 0.88 suggests significant overlap in exposure. AGG charges 0.03%/yr vs 0.15%/yr for IEF.
Performance
AGG vs. IEF - Performance Comparison
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Returns By Period
In the year-to-date period, AGG achieves a 0.64% return, which is significantly higher than IEF's -0.30% return. Over the past 10 years, AGG has outperformed IEF with an annualized return of 1.58%, while IEF has yielded a comparatively lower 0.60% annualized return.
AGG
- 1D
- 0.58%
- 1M
- 0.59%
- YTD
- 0.64%
- 6M
- 0.74%
- 1Y
- 5.01%
- 3Y*
- 4.07%
- 5Y*
- 0.08%
- 10Y*
- 1.58%
IEF
- 1D
- 0.69%
- 1M
- 0.36%
- YTD
- -0.30%
- 6M
- -0.28%
- 1Y
- 4.02%
- 3Y*
- 2.67%
- 5Y*
- -1.21%
- 10Y*
- 0.60%
AGG vs. IEF - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|---|
AGG iShares Core U.S. Aggregate Bond ETF | 0.64% | 7.19% | 1.31% | 5.65% | -13.02% | -1.77% | 7.48% | 8.46% | 0.09% | 3.55% |
IEF iShares 7-10 Year Treasury Bond ETF | -0.30% | 8.03% | -0.63% | 3.64% | -15.15% | -3.33% | 10.01% | 8.03% | 0.99% | 2.55% |
Correlation
The correlation between AGG and IEF is 0.97 - these two move nearly in lockstep. At this level, holding both provides almost no diversification benefit. If you already own one, adding the other does little to reduce portfolio risk.
| Correlation | |
|---|---|
Correlation (1Y) Calculated over the trailing 1-year period | 0.97 |
Correlation (3Y) Calculated over the trailing 3-year period | 0.98 |
Correlation (5Y) Calculated over the trailing 5-year period | 0.97 |
Correlation (10Y) Calculated over the trailing 10-year period | 0.94 |
Correlation (All Time) Calculated using the full available price history since Sep 26, 2003 | 0.88 |
The correlation between AGG and IEF has been stable across timeframes, ranging from 0.88 to 0.98 - a consistent structural relationship.
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Return for Risk
AGG vs. IEF — Risk / Return Rank
AGG
IEF
AGG vs. IEF - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for iShares Core U.S. Aggregate Bond ETF (AGG) and iShares 7-10 Year Treasury Bond ETF (IEF). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.
Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.
| AGG | IEF | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | +0.46 | ||
| Sortino ratioReturn per unit of downside risk | +0.66 | ||
| Omega ratioGain probability vs. loss probability | 1.23 | 1.15 | +0.09 |
| Calmar ratioReturn relative to maximum drawdown | 1.82 | 0.99 | +0.83 |
| Martin ratioReturn relative to average drawdown | 5.38 | 2.80 | +2.59 |
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Drawdowns
AGG vs. IEF - Drawdown Comparison
The maximum AGG drawdown since its inception was -18.43%, smaller than the maximum IEF drawdown of -23.93%. Use the drawdown chart below to compare losses from any high point for AGG and IEF.
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Drawdown Indicators
| AGG | IEF | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -18.43% | -23.93% | +5.50% |
Max Drawdown (1Y)Largest decline over 1 year | -2.76% | -4.07% | +1.31% |
Max Drawdown (3Y)Largest decline over 3 years | -6.11% | -7.74% | +1.63% |
Max Drawdown (5Y)Largest decline over 5 years | -17.82% | -21.40% | +3.58% |
Max Drawdown (10Y)Largest decline over 10 years | -18.43% | -23.93% | +5.50% |
Current DrawdownCurrent decline from peak | -1.76% | -11.02% | +9.26% |
Average DrawdownAverage peak-to-trough decline | -2.71% | -5.35% | +2.64% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 0.93% | 1.44% | -0.51% |
Volatility
AGG vs. IEF - Volatility Comparison
The current volatility for iShares Core U.S. Aggregate Bond ETF (AGG) is 1.36%, while iShares 7-10 Year Treasury Bond ETF (IEF) has a volatility of 1.61%. This indicates that AGG experiences smaller price fluctuations and is considered to be less risky than IEF based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| AGG | IEF | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 1.36% | 1.61% | -0.25% |
Volatility (6M)Calculated over the trailing 6-month period | 2.82% | 3.43% | -0.61% |
Volatility (1Y)Calculated over the trailing 1-year period | 3.83% | 4.73% | -0.90% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 6.10% | 7.71% | -1.61% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 5.41% | 6.63% | -1.22% |
AGG vs. IEF - Expense Ratio Comparison
AGG has a 0.03% expense ratio, which is lower than IEF's 0.15% expense ratio. Despite the difference, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.
Dividends
AGG vs. IEF - Dividend Comparison
AGG's dividend yield for the trailing twelve months is around 3.97%, more than IEF's 3.89% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
AGG iShares Core U.S. Aggregate Bond ETF | 3.97% | 3.89% | 3.74% | 3.13% | 2.39% | 1.77% | 2.14% | 2.70% | 2.72% | 2.32% | 2.39% | 2.45% |
IEF iShares 7-10 Year Treasury Bond ETF | 3.89% | 3.77% | 3.62% | 2.91% | 1.96% | 0.83% | 1.08% | 2.08% | 2.24% | 1.82% | 1.81% | 1.90% |
Frequently Asked Questions
With a correlation of 0.97, AGG and IEF move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.
IEF has higher volatility (1.61%) compared to AGG (1.36%). In terms of maximum drawdown, AGG dropped -18.43% vs IEF's -23.93%.
On 10-year performance, AGG leads with 1.58% vs 0.60% for IEF. On fees, AGG is cheaper at 0.03% per year. On volatility, AGG has been the lower-risk option at 1.36%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 10-year period, AGG has performed better with a 1.58% return vs 0.60%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
AGG is cheaper with a 0.03% expense ratio, compared with 0.15% for IEF.
AGG has the higher dividend yield at 3.97%, compared with 3.89% for IEF.
AGG is categorized as Total Bond Market, while IEF is Government Bonds. AGG tracks Bloomberg U.S. Aggregate Bond Index, while IEF tracks ICE U.S. Treasury 7-10 Year Bond Index. Their fees differ too: 0.03% for AGG and 0.15% for IEF.
AGG currently has the higher Sharpe Ratio (1.32 vs 0.86), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.
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