Two of the largest broad-market bond exchange-traded funds are trading with virtually no meaningful divergence. Over the past year AGG has underperformed BND by just 0.03 percentage points, leaving the trade without a clear relative advantage for investors looking to express a spread between the two funds.
Snapshot
- iShares Core US Aggregate Bond ETF (AGG): $96.27, down 0.43%, as of Sep 10, 1:04 PM EDT - 1M: -1.00% - 3M: -2.08% - 1Y: -4.15%
- Vanguard Total Bond Market ETF (BND): $71.43, down 0.43%, as of Sep 10, 1:04 PM EDT - 1M: -1.00% - 3M: -2.03% - 1Y: -4.12%
Performance figures are as of Sep 10, 1:04 PM EDT.
Relative performance table
| Period | AGG | BND | AGG minus BND |
|---|---|---|---|
| 1 day | -0.43% | -0.43% | 0.00 pp |
| 1 week | -0.70% | -0.70% | 0.00 pp |
| 1 month | -1.00% | -1.00% | 0.00 pp |
| 3 months | -2.08% | -2.03% | -0.05 pp |
| 6 months | -3.84% | -3.76% | -0.08 pp |
| 1 year | -4.15% | -4.12% | -0.03 pp |
Technical backdrop
Both AGG and BND carry technical indicators that point toward persistent weakness. Daily and weekly dashboards show Strong Sell signals for each fund. Relative Strength Index (RSI) readings sit near 32, which places both ETFs close to oversold territory.
That technical profile creates a split in potential outcomes. On the downside, both funds remain below short-term moving averages, exhibit negative MACD readings, and face strong trend pressure. On the upside, oversold conditions could allow a short-term rebound. Even so, any bounce would likely see the pair move in tandem rather than produce a decisive leader between AGG and BND.
Dollar-neutral equivalence and practical implications
On a dollar-neutral basis, one AGG share is roughly equivalent to 1.35 BND shares at current prices. That conversion underscores the near interchangeability of the two funds for investors attempting a relative-value expression. However, the spread has not produced meaningful returns; the pair has behaved more like nearly identical exposures than a differentiated trade.
Bottom line
The AGG/BND pairing remains a viable way to express a relative-value stance on broad U.S. bond market exposure, but to date the spread has not rewarded that view. A convincing confirmation would require AGG to begin outperforming BND over a multi-week period rather than merely moving in sync on intermittent bounces.
Note: Historical data availability is limited to 10 years on the referenced Pro+ plan.