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Investment Q&A

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iShares Core Canadian Universe Bond Index ETF (XBB)
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- View Questions on XBB
iShares Core U.S. Aggregate Bond ETF (AGG)
- View AGG Profile
- View Questions on AGG

Q: Is there any advantage of buying US bonds like AGG over XBB? I notice the MER of 0.03% is a bit cheaper.

Thanks

Asked by Brent on December 17, 2024

5i Research Answer:

The US space is likely going to be a bit more diverse in its holdings. Both are large and low fee funds so we would not really be concerned on the fund structures here. The yield on AGG is 3.4% vs 3.1% for XBB. We think both are fine and fluctuations in FX are likely going to be the bigger driver of returns between the two. AGG, with a stronger US economy and more diverse set of holdings, might be slightly 'safer' than XBB.

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