ETF Spotlight on iShares Barclays Aggregate Bond Fund (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
Max Chen contributed to this article.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.