Skip to content

AGG vs. IXUS: What’s The Difference?

The iShares Core U.S. Aggregate Bond ETF (AGG) and the iShares Core MSCI Total International Stock ETF (IXUS) are both among the Top 100 ETFs. AGG is a iShares Intermediate-Term Bond fund and IXUS is a iShares Foreign Large Blend fund. So, what’s the difference between AGG and IXUS? And which fund is better?

The expense ratio of AGG is 0.05 percentage points lower than IXUS’s (0.04% vs. 0.09%). AGG is mostly comprised of AAA bonds while IXUS has a high exposure to the financial services sector. Overall, AGG has provided lower returns than IXUS over the past ten years.

In this article, we’ll compare AGG vs. IXUS. We’ll look at holdings and fund composition, as well as at their industry exposure and performance. Moreover, I’ll also discuss AGG’s and IXUS’s portfolio growth, annual returns, and risk metrics and examine how these affect their overall returns.

TIP: Keep track of all your investments with Personal Capital. I use this amazing tool to aggregate all investments in one place and make sure I'm on track to financial freedom. Oh, and did I mention it's free? Try it out here (link to Personal Capital).

Summary

AGGIXUS
NameiShares Core U.S. Aggregate Bond ETFiShares Core MSCI Total International Stock ETF
CategoryIntermediate-Term BondForeign Large Blend
IssueriSharesiShares
AUM88.8B29.54B
Avg. Return4.04%6.09%
Div. Yield1.95%2.13%
Expense Ratio0.04%0.09%

The iShares Core U.S. Aggregate Bond ETF (AGG) is a Intermediate-Term Bond fund that is issued by iShares. It currently has 88.8B total assets under management and has yielded an average annual return of 4.04% over the past 10 years. The fund has a dividend yield of 1.95% with an expense ratio of 0.04%.

The iShares Core MSCI Total International Stock ETF (IXUS) is a Foreign Large Blend fund that is issued by iShares. It currently has 29.54B total assets under management and has yielded an average annual return of 6.09% over the past 10 years. The fund has a dividend yield of 2.13% with an expense ratio of 0.09%.

AGG’s dividend yield is 0.18% lower than that of IXUS (1.95% vs. 2.13%). Also, AGG yielded on average 2.05% less per year over the past decade (4.04% vs. 6.09%). The expense ratio of AGG is 0.05 percentage points lower than IXUS’s (0.04% vs. 0.09%).

FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).

Fund Composition

Holdings

AGG - Holdings

AGG Bond SectorsWeight
AAA68.92%
BBB15.38%
A11.16%
AA2.92%
Others1.63%
Below B0.0%
B0.0%
BB0.0%
US Government0.0%

AGG’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Others at 68.92%, 15.38%, 11.16%, 2.92%, and 1.63%. The fund is less weighted towards Below B (0.0%), B (0.0%), and BB (0.0%) rated bonds.

IXUS - Holdings

IXUS HoldingsWeight
Taiwan Semiconductor Manufacturing Co Ltd1.64%
Tencent Holdings Ltd1.35%
Alibaba Group Holding Ltd Ordinary Shares1.34%
Nestle SA1.1%
Samsung Electronics Co Ltd1.06%
ASML Holding NV0.9%
Roche Holding AG0.81%
LVMH Moet Hennessy Louis Vuitton SE0.67%
Novartis AG0.62%
Toyota Motor Corp0.59%

IXUS’s Top Holdings are Taiwan Semiconductor Manufacturing Co Ltd, Tencent Holdings Ltd, Alibaba Group Holding Ltd Ordinary Shares, Nestle SA, and Samsung Electronics Co Ltd at 1.64%, 1.35%, 1.34%, 1.1%, and 1.06%.

ASML Holding NV (0.9%), Roche Holding AG (0.81%), and LVMH Moet Hennessy Louis Vuitton SE (0.67%) have a slightly smaller but still significant weight. Novartis AG and Toyota Motor Corp are also represented in the IXUS’s holdings at 0.62% and 0.59%.

NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).

Risk Analysis

AGGIXUS
Mean Return0.280
R-squared99.960
Std. Deviation3.030
Alpha-0.080
Beta1.010
Sharpe Ratio0.90
Treynor Ratio2.70

The iShares Core U.S. Aggregate Bond ETF (AGG) has a Alpha of -0.08 with a Mean Return of 0.28 and a Treynor Ratio of 2.7. Its Beta is 1.01 while AGG’s Standard Deviation is 3.03. Furthermore, the fund has a Sharpe Ratio of 0.9 and a R-squared of 99.96.

The iShares Core MSCI Total International Stock ETF (IXUS) has a Mean Return of 0 with a Standard Deviation of 0 and a R-squared of 0. Its Treynor Ratio is 0 while IXUS’s Beta is 0. Furthermore, the fund has a Alpha of 0 and a Sharpe Ratio of 0.

AGG’s Mean Return is 0.28 points higher than that of IXUS and its R-squared is 99.96 points higher. With a Standard Deviation of 3.03, AGG is slightly more volatile than IXUS. The Alpha and Beta of AGG are 0.08 points lower and 1.01 points higher than IXUS’s Alpha and Beta.

FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!

Performance

Annual Returns

AGG vs. IXUS - Annual Returns

YearAGGIXUS
20207.42%11.14%
20198.68%21.85%
2018-0.05%-14.55%
20173.53%28.08%
20162.56%4.66%
20150.48%-4.62%
20146.04%-3.96%
2013-2.15%15.85%
20124.04%0.0%
20117.58%0.0%
20106.3%0.0%

AGG had its best year in 2019 with an annual return of 8.68%. AGG’s worst year over the past decade yielded -2.15% and occurred in 2013. In most years the iShares Core U.S. Aggregate Bond ETF provided moderate returns such as in 2017, 2012, and 2014 where annual returns amounted to 3.53%, 4.04%, and 6.04% respectively.

The year 2017 was the strongest year for IXUS, returning 28.08% on an annual basis. The poorest year for IXUS in the last ten years was 2018, with a yield of -14.55%. Most years the iShares Core MSCI Total International Stock ETF has given investors modest returns, such as in 2011, 2010, and 2016, when gains were 0.0%, 0.0%, and 4.66% respectively.

Portfolio Growth

AGG vs. IXUS - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
AGG$10,000$13,2014.04%
IXUS$10,000$14,2096.09%

A $10,000 investment in AGG would have resulted in a final balance of $13,201. This is a profit of $3,201 over 7 years and amounts to a compound annual growth rate (CAGR) of 4.04%.

With a $10,000 investment in IXUS, the end total would have been $14,209. This equates to a $4,209 profit over 7 years and a compound annual growth rate (CAGR) of 6.09%.

AGG’s CAGR is 2.05 percentage points lower than that of IXUS and as a result, would have yielded $1,008 less on a $10,000 investment. Thus, AGG performed worse than IXUS by 2.05% annually.


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!

2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.

5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply

Your email address will not be published.