AGG vs SCHZ: Which ETF Is Better in 2026?
A metric-by-metric comparison of iShares Core U.S. Aggregate Bond ETF (AGG) and Schwab U.S. Aggregate Bond ETF (SCHZ) — both US Bonds - Broad funds — using ETFValuer's daily-updated rankings.
Educational content — not financial advice. Data as of July 25, 2026. ~5 minute read.
The Verdict
AGG and SCHZ are close to the same fund wearing different labels. Both sit in the US Bonds - Broad category and their daily returns move almost identically, so this is not really a question of which fund is better — it is a question of which one is cheaper to own and easier to trade in your account. Everything below is about finding the small, structural edges, because the investment exposure is a wash.
On ETFValuer's overall model — which blends return, risk-adjusted performance, cost, drawdown, size and volatility — AGG scores higher: 59.4 (Grade C) versus 55.5 for SCHZ. That doesn't make SCHZ a bad fund; it means AGG currently edges it out on this specific mix of factors. Read the metric-by-metric breakdown below before deciding which matters more for your own portfolio.
Head-to-Head: Every Metric
| AGG | SCHZ | |
|---|---|---|
| Category | US Bonds - Broad | US Bonds - Broad |
| Expense ratio | 0.03% | 0.03% |
| Fund size (AUM) | $138.8B | $10.6B |
| Dividend yield | 2.55% | 4.10% |
| 1-year return | +3.09% | +3.05% |
| 3-year return | +11.69% | +11.64% |
| Volatility | 3.79% | 3.73% |
| Max drawdown | -5.71% | -5.81% |
| Sharpe ratio | -0.50 | -0.52 |
| ETFValuer score | 59.4 | 55.5 |
| Grade | C | C |
| Overall rank | #254 | #317 |
Bold marks the better value in each row. "Better" is directional only (e.g. lower cost, higher return) — it isn't a recommendation by itself. See the full methodology.
Cost
On cost, the two are essentially tied — AGG charges 0.03% a year versus SCHZ's 0.03%. A difference this small (about $0.00 a year on a $10,000 position) isn't a reason to choose one fund over the other. That matters more than usual here: when two funds track the same exposure this closely, fee is normally the whole argument — and with the fees this close, there is no argument left. Liquidity and whichever one trades commission-free in your account become the tiebreaker.
What AGG's Fees Cost You
AGG charges an expense ratio of 0.03% a year, deducted automatically from the fund's value. Small percentages compound into real money — adjust the figures below to see the impact on your own numbers.
Assumes a constant gross return and no additional contributions — a simplification, but it isolates exactly what the expense ratio costs. Try the full fee calculator to model contributions and compare any two funds.
Performance & Risk
Over the trailing 3 years, AGG returned +11.69% versus +11.64% for SCHZ — a gap of about 0.0 percentage points. On risk, AGG has held up better historically, with a shallower max drawdown (-5.71% vs. -5.81%). AGG currently has the better risk-adjusted return (Sharpe ratio of -0.50 vs. -0.52), meaning it delivered more return per unit of volatility taken on. Read that gap sceptically: for funds tracking near-identical exposure, a 0.0-point difference over three years is mostly noise from fee drag and timing, not evidence that one manager is better than the other.
How Closely Do They Track Each Other?
Over the last 3.0 years of daily returns (752 shared trading days), AGG and SCHZ show a extremely high correlation of 0.989 — very close substitutes. Holding both would add very little diversification: when one falls, the other almost always falls with it. Treat these as alternatives to each other, not as complements in the same portfolio.
| Measure | Value | What it means |
|---|---|---|
| Daily return correlation | 0.989 | Extremely high — very close substitutes |
| R-squared | 97.7% | 97.7% of AGG's daily moves are explained by SCHZ's |
| Tracking error (annualised) | 0.80% | Typical yearly spread between the two funds' returns |
| Annualised return over 3.0y | AGG +3.78% · SCHZ +3.74% | AGG ahead by 0.04 points a year |
Correlation alone understates how far these can drift. Across every rolling 12-month window in the period, AGG finished as much as +0.3 points ahead of SCHZ at the best extreme and -0.2 points at the worst — a 0.5-point spread between the best and worst year of relative performance. Two funds can correlate tightly day to day and still deliver very different outcomes over any single year you happen to hold them.
Calculated from daily total returns over the trailing 3-year window, recomputed every day this site refreshes. Correlation of 1.00 means the two funds moved in lockstep; 0.00 means their daily moves were unrelated.
Holdings Overlap
AGG and SCHZ hold 1 of the same companies among their top 10 positions. Those shared names make up 3.2% of AGG and 3.5% of SCHZ. That's modest duplication — the funds are mostly distinct at the top, so holding both can still add diversification.
| Shared Holding | AGG Weight | SCHZ Weight |
|---|---|---|
| United States Treasury | 3.21% | 3.47% |
Compares the top 10 reported holdings from each fund's most recent SEC N-PORT-P filing, so it understates total overlap — funds tracking similar indexes overlap far more deeply than the top 10 alone can show. Search any company across all tracked funds with the Stock Overlap tool.
Which One Should You Pick?
Lean AGG if…
- You want the deeper, more liquid market ($139B in assets vs $11B) and the tighter spread (0.000% vs 0.175%)
Lean SCHZ if…
- Current income matters to you — it yields 4.10% against 2.55%
Whichever you pick, holding both at full weight is usually the wrong answer — see the overlap and correlation sections above.
Frequently Asked Questions
Is AGG or SCHZ better?
On ETFValuer's overall model — which blends return, risk-adjusted performance, cost, drawdown, size and volatility — AGG scores higher: 59.4 (Grade C) versus 55.5 for SCHZ. That doesn't make SCHZ a bad fund; it means AGG currently edges it out on this specific mix of factors. Read the metric-by-metric breakdown below before deciding which matters more for your own portfolio.
Which has the lower expense ratio, AGG or SCHZ?
SCHZ currently has the lower expense ratio (0.03% vs. 0.03%).
Can I hold both AGG and SCHZ?
You can, but there's little point. AGG and SCHZ have a daily return correlation of 0.99 over the past 3.0 years, meaning they move almost in lockstep. Holding both roughly doubles a single bet rather than spreading it — pick whichever wins on cost and liquidity and put the money in one place.
Go deeper on either fund
Full daily-updated metrics, holdings context, and category peers.