An institutional client recently asked us what the largest Fixed Income ETF in the U.S. listed universe is currently, and although it is a reasonably tight race at the moment, BND (Vanguard Total Bond Market, Expense Ratio 0.08%) ranks at the top with $27.4 billion in assets under management.
Having debuted in 2007, it usurped the top position from AGG (iShares Core Total U.S. Bond Market, Expense Ratio 0.08%) some time ago and has not looked back. Both funds have had strong inflows year to date, both taking in north of $1 billion via creation activity.
After BND, AGG, and the third largest Fixed Income ETF LQD (iShares Investment Grade Corporate Bond, Expense Ratio 0.15%), there is a steep drop-off in terms of assets under management throughout the rest of the FI ETF landscape, so BND, AGG, and LQD are truly giants within this niche. BND tracks the Barclays Capital U.S. Aggregate Bond Index while AGG tracks you guessed it, the Barclays Capital U.S. Aggregate Bond Index.
Both funds as seen above have identical expense ratios at a very low 8 basis points. It is also worth pointing out that both of these funds rank among the top twenty U.S. listed ETFs in general, in terms of overall asset sizes, showing their heft.
When it comes down to it, institutional entities, investment managers such as ETF strategists, as well as retail investors may have a natural affinity towards one issuer over the other here, those being Vanguard or iShares, as it would be hard to argue that one product is supremely “better” than the other as both are viable selections and individual preference may make the ultimate call here.