AGG vs IEF: Correlation
iShares Core US Aggregate Bond ETF (AGG) and iShares 7-10 Year Treasury Bond ETF (IEF) show a very strong relationship: their 3-year correlation of weekly returns is 0.98.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are AGG and IEF?
Over the past 3 years, AGG and IEF moved with a correlation of 0.98, which is very strong, meaning they move nearly in lockstep. Recent behaviour matches the longer record: 0.97 over 1 year against 0.98 over 3. Over 5 years the correlation is 0.98, and the annualized covariance of weekly returns is 33.9 %².
Few assets follow AGG as closely as IEF, which ranks #2 of 34 tracked partners. Twelve-month performance is nearly a tie, at +2.3% for AGG and +0.9% for IEF. The rolling one-year correlation stayed in a tight band between 0.96 and 0.99 over the past three years, which points to a structural rather than episodic relationship.
How is this computed?
Pearson correlation on weekly returns: ρ(A,B) = cov(rA, rB) / (σA · σB), over windows of 52, 156 and 260 weeks. Covariance is annualized (×52) and expressed in %². Full definitions on the methodology page.
AGG vs IEF: side by side
| AGG (iShares Core US Aggregate Bond ETF) | IEF (iShares 7-10 Year Treasury Bond ETF) | |
|---|---|---|
| 1-year return | +2.3% | +0.9% |
| 5-year return | -1.1% | -7.9% |
| Volatility (ann.) | 5.3% | 6.5% |
| Beta vs S&P 500 | 0.07 | 0.04 |
| Max drawdown (3Y) | -4.8% | -6.9% |
| Dividend yield | 4.05% | 3.96% |
| Expense ratio | 0.03% | 0.15% |
| Assets under management | $137.1B | $47.2B |
| Sector / category | ETF · Bonds | ETF · Bonds |
AGG is an Intermediate Core Bond fund from iShares: $137.1B under management, a 0.03% expense ratio, a 4.05% trailing dividend yield. On the fund side, IEF sits in the Long Government category at iShares, with $47.2B under management, a 0.15% expense ratio, a 3.96% trailing dividend yield.
Year-by-year returns
| Year | AGG | IEF |
|---|---|---|
| 2022 | -13.0% | -15.2% |
| 2023 | +5.7% | +3.6% |
| 2024 | +1.3% | -0.6% |
| 2025 | +7.2% | +8.0% |
| 2026 | +0.3% | -0.8% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are AGG and IEF good diversifiers for each other?
Not really. At 0.98, the two trade almost as one position, and owning both buys little extra protection.
FAQ
What is the correlation between AGG and IEF?
As of 2026-08-27, the correlation of weekly returns between AGG and IEF is 0.98 over 3 years, 0.97 over 1 year and 0.98 over 5 years.
Is IEF a good diversifier for AGG?
Not really. At 0.98, the two trade almost as one position, and owning both buys little extra protection.
What does a correlation of 0.98 mean?
A reading of 0.98 sits on a scale from −1 (opposite moves) through 0 (unrelated) to +1 (identical moves). Correlation captures direction, not magnitude or performance.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/agg-vs-ief.json
Embed this badge (it refreshes with the data), with attribution:
[](https://www.pairbook.io/pair/agg-vs-ief/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: AGG correlations · IEF correlations
