BNDX vs IAGG ETF Comparison: AI Score, Valuation, Performance and Upside
BNDX and IAGG are functionally identical ETFs — both providing USD-hedged international investment-grade bond exposure at 0.07% expense ratio. BNDX has larger AUM and is part of Vanguard's two-fund/three-fund portfolio approach. IAGG is iShares' equivalent for investors in the BlackRock ecosystem. Performance difference between the two is minimal; brokerage affiliation is the practical decision driver.
BNDX vs IAGG — Both are USD-hedged international investment-grade bond ETFs at identical expense ratios. Choose BNDX for Vanguard ecosystem and larger AUM liquidity; choose IAGG for iShares/BlackRock platform integration. The investment thesis is the same: global bond diversification with currency risk eliminated.
BNDX and IAGG are closely matched — they split the tracked metrics evenly. IAGG has delivered stronger 1-year price return (+0.76% vs -0.37% for BNDX).
- use Vanguard's two-fund or three-fund portfolio approach (BND + BNDX for complete global bond exposure) in their Vanguard or Fidelity accounts
- want the most liquid and largest international bond ETF with the deepest institutional ownership for ease of rebalancing at scale
- follow Vanguard's model portfolio allocation frameworks that explicitly reference BNDX as the international bond component
- prefer BNDX's longer track record and larger AUM providing more extensive historical performance data and institutional familiarity
- build portfolios within iShares/BlackRock's ecosystem using IAGG alongside IEFA (international equity), IEMG (EM equity), and IUSB (US bonds)
- prefer BlackRock's Aladdin-based portfolio construction tools that integrate IAGG as the international bond building block
- want issuer-capped international bond exposure that may provide marginally better diversification vs uncapped international bond indexes
- hold accounts at brokerages with preferred iShares fund placement or commission structures favoring IAGG
| Metric | BNDX | IAGG |
|---|---|---|
| ETF scorei | 33.0 | 35.0 |
| Latest closei | $47.11 | $49.49 |
| 1M returni | -0.76% | -0.58% |
| 6M returni | -0.70% | +0.02% |
| 1Y returni | -0.37% | +0.76% |
The ETF score weights long-term returns and risk-adjusted performance most heavily, but still rewards low expense ratios, larger fund size, and broader diversification — so it can favor low-cost, broad, mega-cap funds over smaller thematic or actively-managed funds even when the latter have delivered stronger returns.
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | BNDX | IAGG |
|---|---|---|
| 1Y ago | $10.43K (+4.3%) started 2025-09-17 | $10.54K (+5.4%) started 2025-09-17 |
| 5Y ago | $12.3K (+23.0%) started 2021-09-17 | $12.29K (+22.9%) started 2021-09-17 |
| 10Y ago | $16.45K (+64.5%) started 2016-09-19 | $16.3K (+63.0%) started 2016-09-19 |
Hypothetical — past performance does not guarantee future results.
| Metric | BNDX | IAGG |
|---|---|---|
| Expense ratioi | 0.07% | 0.07% |
| Total assets (AUM)i | $123.03B | $11.39B |
| Dividend yieldi | 4.58% | 4.54% |
| Trailing P/Ei | N/A | N/A |
| Betai | 0.23 | 0.23 |
| 52-week change | -0.37% | 0.76% |
| Metric | BNDX | IAGG |
|---|---|---|
| 1Y returni | -0.37% | +0.76% |
| 6M returni | -0.70% | +0.02% |
| 1M returni | -0.76% | -0.58% |
| 1Y Sharpe ratio | -1.31 | -1.25 |
| Betai | 0.23 | 0.23 |
| Dividend yieldi | 4.58% | 4.54% |
| 5Y CAGR | -0.08% | +0.83% |
Over the past year, BNDX and IAGG have moved strongly in the same direction (correlation of 0.94), based on daily returns.
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | BNDX | IAGG |
|---|---|---|---|
| 1Y | Growthi | -0.37% | +0.76% |
| CAGRi | -0.37% | +0.76% | |
| Volatilityi | 3.65% | 2.96% | |
| Sharpe ratioi | -1.31 | -1.25 | |
| Sortino ratioi | -1.74 | -1.67 | |
| Max drawdowni | 3.16% | 2.32% | |
| Current drawdowni | 2.66% | 1.51% | |
| Avg drawdowni | 1.07% | 0.68% | |
| Ulcer Indexi | 1.35% | 0.90% | |
| Max daily dropi | 0.83% | 0.68% | |
| Max wkly dropi | 1.34% | 1.02% | |
| 5Y | Growthi | -0.37% | +4.22% |
| CAGRi | -0.08% | +0.83% | |
| Volatilityi | 4.92% | 4.52% | |
| Sharpe ratioi | -0.90 | -0.79 | |
| Sortino ratioi | -1.25 | -1.10 | |
| Max drawdowni | 15.18% | 13.10% | |
| Current drawdowni | 2.66% | 1.51% | |
| Avg drawdowni | 5.60% | 4.16% | |
| Ulcer Indexi | 7.14% | 5.76% | |
| Max daily dropi | 1.46% | 1.05% | |
| Max wkly dropi | 3.26% | 2.65% | |
| 10Y | Growthi | +15.21% | +21.16% |
| CAGRi | +1.43% | +1.94% | |
| Volatilityi | 4.10% | 4.02% | |
| Sharpe ratioi | -0.73 | -0.62 | |
| Sortino ratioi | -0.98 | -0.85 | |
| Max drawdowni | 16.23% | 13.88% | |
| Current drawdowni | 2.66% | 1.51% | |
| Avg drawdowni | 3.80% | 2.98% | |
| Ulcer Indexi | 5.75% | 4.62% | |
| Max daily dropi | 2.29% | 2.11% | |
| Max wkly dropi | 5.32% | 5.22% |
| Category | BNDX | IAGG |
|---|---|---|
| Fund name | Vanguard Total International Bond Index Fund ETF Shares | iShares Core International Aggregate Bond ETF |
| Type | ETF | ETF |
| Expense ratioi | 0.07% | 0.07% |
| Total assets (AUM)i | $123.03B | $11.39B |
| Dividend yieldi | 4.58% | 4.54% |
- Currency hedging eliminates FX volatility: BNDX's USD hedge removes the additional return variability from foreign currency movements — investors earn international yield premiums without currency risk
- Global bond diversification complement to BND: BNDX + BND provides complete global bond market coverage following the Vanguard two-fund fixed income approach
- 0.07% low expense ratio: Vanguard's cost leadership in international bonds — BNDX's expense is competitive for a currency-hedged international bond fund that typically charges 0.20-0.30%+
- Identical 0.07% expense ratio to BNDX: IAGG provides equivalent international bond exposure at the same Vanguard-level cost — no expense penalty for choosing iShares over Vanguard for international bonds
- iShares ecosystem integration: IAGG pairs naturally with iShares core equity (IEFA, IEMG) and US bond (IUSB) ETFs in BlackRock's portfolio construction tools
- 10% issuer capping: IAGG's issuer concentration limits may provide marginally better diversification vs BNDX for country/issuer-concentrated international bond markets
- Currency hedging cost varies with rate differentials: hedging costs are tied to the interest rate differential between USD and foreign currencies — when US rates are higher than foreign rates, hedging becomes expensive and reduces BNDX returns
- Developed market low yields: Japan, Germany, and European government bonds often yield less than equivalent US Treasuries — BNDX's yield may be lower than comparable US bond alternatives
- Complexity of hedging exposure: currency hedging adds a derivatives layer that makes BNDX's return attribution more complex than unhedged international bond funds
- Lower AUM and liquidity than BNDX: IAGG has smaller assets than BNDX — slightly wider bid-ask spreads for large institutional rebalancing
- Same currency hedging cost exposure: like BNDX, IAGG's hedging costs vary with US-international rate differentials — not a differentiator between the two
- Near-identical to BNDX for investment purposes: the practical performance difference between BNDX and IAGG is negligible — brokerage preference and ecosystem fit dominate the choice
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