The Vanguard Total Bond Market ETF (BND) eclipsed iShares Barclays Aggregate Bond (AGG) in assets for the first time last week, according to Morningstar. BND now has assets of USD13.9 billion versus AGG’s USD13.8 billion.
Both exchange-traded funds track a version of the Barclays Capital Aggregate Bond Index, which is one of the most widely followed bond benchmarks.
“When BND launched in April 2007, AGG had USD5.6 billion in assets. Vanguard’s fund grew quickly, but AGG kept pace until 2009 when BND’s growth accelerated. This is another example of how low fees win in the very competitive ETF business,” says Robert Goldsborough, ETF Analyst at Morningstar. “BND’s 0.11% expense ratio gives it a substantial fee advantage over AGG with its 0.22% fee. Schwab US Aggregate Bond ETF (SCHZ), with a 0.10% expense ratio, is the lowest-cost fund in the category, but with Vanguard’s trusted name, it is not surprising that BND is winning the fight for assets.”