ETF Spotlight on iShares Barclays Aggregate Bond Fund (NYSEArca: AGG), part of an ongoing series.
Assets: $14.9 billion.
Objective: The iShares Barclays Aggregate Bond Fund tries to reflect the performance of the total U.S. investment grade bond market as defined by the Barclays U.S. Aggregate Bond Index.
Holdings: The fund holds a mixture of Treasury, mortgage-backed, Agency and corporate securities.
What You Should Know:
- BlackRock‘s iShares sponsors the fund.
- AGG has an expense ratio of 0.22%.
- The fund has 1,447 securities and the top ten holdings account for 19.6% of the overall fund.
- Portfolio allocations by S&P credit rating include: AAA 3.1%, AA+ 71.44%, AA 1.0%, AA- 1.2%, A+ 2.7%, A- 6.0%, BBB+ 2.6%, BBB 3.8%, BBB- 2.3%, BB+ 0.1% and BB 0.1%.
- Sector breakdowns include: Treasuries 35.5%, MBS 29.8%, Industrial 11.2%, Financials 6.4%, Agencies 6.3%, Utility 2.2%, CMBS 2.0%, Supranational Agencies 1.3%, Local Authorities 1.3%, Sovereign 1.1% and other 2.8%.
- The ETF has an average maturity of 6.27 years and an average coupon of 4.36%.
- AGG has a distribution yield of 2.62%.
- The fund is up 0.6% over the past month, up 0.6% over the last three months and up 8.2% over the past year.
- AGG is 0.9% above its 200-day exponential moving average.
- “Investors seeking broad exposure should note that the Barclays Aggregate Bond Index excludes a wide range of securities, including floating-rate, Treasury Inflation-Protected Securities, tax-exempt municipal, convertible, foreign, and high-yield bonds,” according to Morningstar analyst Timothy Strauts.
- Since the ETF allocates over 70% of its holdings in U.S. government bonds, Treasuries will effectively drive the fund’s movements.
The Latest News:
- Despite better retail sales numbers, U.S. Treasuries increased Monday on worries over the Eurozone, reports Ellen Freilich for Reuters.
- Yields on the benchmark 10-year Treasury note still ended below the psychological 2% level, with yields hitting as low as 1.95% Monday.
- Joseph LaVorgna, managing director and chief U.S. economist at Deutsche Bank Securities, noted that market participants are cautious about a summer slowdown similar to the past two years.
iShares Barclays Aggregate Bond Fund
For past stories in this series, visit our ETF Spotlight category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.