ISTB vs. AGG

Last updated Jun 3, 2026

ISTB (iShares Core 1-5 Year USD Bond ETF) and AGG (iShares Core U.S. Aggregate Bond ETF) are both exchange-traded funds - ISTB is a Short-Term Bond fund tracking the BBG US Universal 1-5 Year Index (USD), while AGG is a Total Bond Market fund tracking the Bloomberg U.S. Aggregate Bond Index. Both are passively managed. Over the past 10 years, ISTB returned 2.28%/yr vs 1.59%/yr for AGG. A 0.72 correlation means they provide meaningful diversification when combined. ISTB charges 0.06%/yr vs 0.03%/yr for AGG.

Performance

ISTB vs. AGG - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in iShares Core 1-5 Year USD Bond ETF (ISTB) and iShares Core U.S. Aggregate Bond ETF (AGG). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, ISTB achieves a 0.57% return, which is significantly higher than AGG's 0.47% return. Over the past 10 years, ISTB has outperformed AGG with an annualized return of 2.28%, while AGG has yielded a comparatively lower 1.59% annualized return.

ISTB

• 1D: 0.00%
• 1M: 0.11%
• YTD: 0.57%
• 6M: 0.98%
• 1Y: 4.25%
• 3Y*: 4.98%
• 5Y*: 1.90%
• 10Y*: 2.28%

AGG

• 1D: 0.03%
• 1M: 0.14%
• YTD: 0.47%
• 6M: 0.49%
• 1Y: 5.29%
• 3Y*: 4.02%
• 5Y*: 0.23%
• 10Y*: 1.59%

*Multi-year figures are annualized to reflect compound growth (CAGR)

ISTB vs. AGG - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
ISTB iShares Core 1-5 Year USD Bond ETF	0.57%	6.36%	4.37%	5.56%	-6.08%	-0.71%	4.75%	5.61%	1.02%	1.72%
AGG iShares Core U.S. Aggregate Bond ETF	0.47%	7.19%	1.31%	5.65%	-13.02%	-1.77%	7.48%	8.46%	0.09%	3.55%

Correlation

The correlation between ISTB and AGG is 0.91, indicating a strong positive relationship between their price movements. Combining them offers limited diversification - they tend to fall together during downturns.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.91
Correlation (3Y) Calculated over the trailing 3-year period	0.92
Correlation (5Y) Calculated over the trailing 5-year period	0.90
Correlation (10Y) Calculated over the trailing 10-year period	0.80
Correlation (All Time) Calculated using the full available price history since Oct 25, 2012	0.72

The correlation between ISTB and AGG shifts across timeframes, from 0.72 (all time) to 0.92 (3 years), reflecting how their relationship changes across market environments.

Return for Risk

ISTB vs. AGG — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

ISTB

ISTB Risk / Return Rank: 73
ISTB Sharpe Ratio Rank: 73
ISTB Sortino Ratio Rank: 83
ISTB Omega Ratio Rank: 78
ISTB Calmar Ratio Rank: 66
ISTB Martin Ratio Rank: 67

AGG

AGG Risk / Return Rank: 37
AGG Sharpe Ratio Rank: 38
AGG Sortino Ratio Rank: 40
AGG Omega Ratio Rank: 37
AGG Calmar Ratio Rank: 36
AGG Martin Ratio Rank: 35

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

ISTB vs. AGG - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for iShares Core 1-5 Year USD Bond ETF (ISTB) and iShares Core U.S. Aggregate Bond ETF (AGG). 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.

	ISTB	AGG	Difference
Sharpe ratio Return per unit of total volatility	2.41	1.38	+1.03
Sortino ratio Return per unit of downside risk	3.76	2.06	+1.70
Omega ratio Gain probability vs. loss probability	1.47	1.25	+0.23
Calmar ratio Return relative to maximum drawdown	3.31	1.81	+1.50
Martin ratio Return relative to average drawdown	12.67	5.61	+7.06
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

ISTB vs. AGG - Sharpe Ratio Comparison

The current ISTB Sharpe Ratio is 2.41, which is higher than the AGG Sharpe Ratio of 1.38. The chart below compares the historical Sharpe Ratios of ISTB and AGG, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	ISTB	AGG	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.41	1.38	+1.03
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.68	0.04	+0.65
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.91	0.30	+0.62
Sharpe Ratio (All Time) Calculated using the full available price history	0.84	0.59	+0.25

Drawdowns

ISTB vs. AGG - Drawdown Comparison

The maximum ISTB drawdown since its inception was -9.34%, smaller than the maximum AGG drawdown of -18.43%. Use the drawdown chart below to compare losses from any high point for ISTB and AGG.

Drawdown Indicators

	ISTB	AGG	Difference
Max Drawdown Largest peak-to-trough decline	-9.34%	-18.43%	+9.09%
Max Drawdown (1Y) Largest decline over 1 year	-1.26%	-2.76%	+1.50%
Max Drawdown (3Y) Largest decline over 3 years	-1.36%	-6.11%	+4.75%
Max Drawdown (5Y) Largest decline over 5 years	-9.34%	-17.82%	+8.48%
Max Drawdown (10Y) Largest decline over 10 years	-9.34%	-18.43%	+9.09%
Current Drawdown Current decline from peak	-0.34%	-1.93%	+1.59%
Average Drawdown Average peak-to-trough decline	-1.22%	-2.71%	+1.49%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.33%	0.89%	-0.56%

Volatility

ISTB vs. AGG - Volatility Comparison

The current volatility for iShares Core 1-5 Year USD Bond ETF (ISTB) is 0.55%, while iShares Core U.S. Aggregate Bond ETF (AGG) has a volatility of 1.32%. This indicates that ISTB experiences smaller price fluctuations and is considered to be less risky than AGG based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	ISTB	AGG	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.55%	1.32%	-0.77%
Volatility (6M) Calculated over the trailing 6-month period	1.29%	2.76%	-1.47%
Volatility (1Y) Calculated over the trailing 1-year period	1.77%	3.85%	-2.08%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	2.79%	6.09%	-3.30%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	2.51%	5.41%	-2.90%

ISTB vs. AGG - Expense Ratio Comparison

ISTB has a 0.06% expense ratio, which is higher than AGG's 0.03% expense ratio. However, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

ISTB vs. AGG - Dividend Comparison

ISTB's dividend yield for the trailing twelve months is around 4.25%, more than AGG's 3.98% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
AGG iShares Core U.S. Aggregate Bond ETF	3.98%	3.89%	3.74%	3.13%	2.39%	1.77%	2.14%	2.70%	2.72%	2.32%	2.39%	2.45%
ISTB iShares Core 1-5 Year USD Bond ETF	4.25%	4.12%	3.83%	2.97%	2.01%	1.69%	2.20%	2.75%	2.57%	2.06%	1.90%	1.58%

Frequently Asked Questions

Can I hold both ISTB and AGG in my portfolio?

With a correlation of 0.91, ISTB and AGG 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.

Which is riskier, ISTB or AGG?

AGG has higher volatility (1.32%) compared to ISTB (0.55%). In terms of maximum drawdown, ISTB dropped -9.34% vs AGG's -18.43%.

Which ETF is better, ISTB or AGG?

On 10-year performance, ISTB leads with 2.28% vs 1.59% for AGG. On fees, AGG is cheaper at 0.03% per year. On volatility, ISTB has been the lower-risk option at 0.55%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, ISTB or AGG?

Over the 10-year period, ISTB has performed better with a 2.28% return vs 1.59%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, ISTB or AGG?

AGG is cheaper with a 0.03% expense ratio, compared with 0.06% for ISTB.

Which ETF pays a higher dividend yield, ISTB or AGG?

ISTB has the higher dividend yield at 4.25%, compared with 3.98% for AGG.

What is the main difference between ISTB and AGG?

ISTB is categorized as Short-Term Bond, while AGG is Total Bond Market. ISTB tracks BBG US Universal 1-5 Year Index (USD), while AGG tracks Bloomberg U.S. Aggregate Bond Index. Their fees differ too: 0.06% for ISTB and 0.03% for AGG.

Which has better risk-adjusted returns?

ISTB currently has the higher Sharpe Ratio (2.41 vs 1.38), 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.