Investing Assets & Markets Mutual Funds Bloomberg US Aggregate Bond Index Learn about this broad-based bond index and the funds that invest in it By Kent Thune Kent Thune Twitter Kent Thune has spent more than two decades in the financial services industry and owns Atlantic Capital Investments, an investment advisory firm, in Hilton Head Island, South Carolina. He's written hundreds of articles for a range of outlets, including The Balance, Kiplinger, Marketwatch, and The Motley Fool. learn about our editorial policies Updated on March 2, 2022 Reviewed by Amilcar Chavarria Reviewed by Amilcar Chavarria Amilcar Chavarria is a fintech and blockchain entrepreneur with expertise in cryptocurrency, blockchain, fintech, investing, and personal finance. learn about our financial review board Fact checked by Kyra Baker Fact checked by Kyra Baker Kyra Baker is a fact-checker with nearly 10 years of experience working and assisting on editorial projects within the culture, arts, and publishing spaces. For the past eight years, she has worked as a fact-checker at Art Papers Magazine, an Atlanta, Georgia-based art magazine. She leverages this experience for The Balance, fact checking content for accuracy across a variety of financial topics. learn about our editorial policies Share Tweet Pin Email In This Article View All In This Article What Is It? Investing in the Aggregate Bond Index Benefits of Investing The Bottom Line Photo: Counter/Getty Images If you've ever invested in a total bond market index fund, you've invested in a mutual fund or exchange-traded fund (ETF) that passively tracks the performance of the Bloomberg US Aggregate Bond Index, or "the Agg". Learn more about this broad-based bond index and the funds that invest in it to see whether these funds are right for you. Key Takeaways The Bloomberg US Aggregate Bond Index covers taxable corporate bonds, Treasury bonds, asset-backed securities, and municipal bonds.The Vanguard Total Bond Market Index Fund (VBMFX) is a large mutual fund that tracks the Bloomberg US Aggregate Bond Index.Aggregate bonds provide simplicity in investing, broad diversification, and low expenses.The Bloomberg US Aggregate Bond Index isn’t an investment in itself, but you can invest in bond index mutual funds and ETFs that track it. What Is the Bloomberg US Aggregate Bond Index? The Bloomberg US Aggregate Bond Index or "the Agg" is a broad benchmark index for the U.S. bond market. The index covers all major types of bonds, including taxable corporate bonds, Treasury bonds, and municipal bonds. Note Because of its wide range of bond market coverage, bond funds that track this index are often called "total bond index funds." How To Invest in the Aggregate Bond Index Investors can capture the performance of the overall bond market by investing in a mutual fund or an exchange-traded fund (ETF) that seeks to replicate the performance of the index. The broad-based bond benchmark index was formerly known as the Barclays Capital Aggregate Bond Index, or BarCap Aggregate, and before that it was known as the Lehman Brothers Aggregate Bond Index. The largest mutual fund that tracks the Bloomberg US Aggregate Bond Index is Vanguard Total Bond Market Index Fund (VBMFX). It is only available to new investors in the form of Admiral Shares, trading as VBTLX. ETFs that track the index include the Schwab U.S. Aggregate Bond Index (SCHZ), the Vanguard Total Bond Market ETF (BND), and the iShares Core U.S. Aggregate Bond Index (AGG), which is the largest ETF of its kind. Benefits of Investing in Aggregate Bond Index Funds There are several benefits of investing in an aggregate bond index fund, including broad diversification, simplicity, passive management, low expenses, and long-term performance. Here are details on the benefits of aggregate bond index funds, also known as total bond market index funds: Broad Diversification: One key advantage of using mutual funds or ETFs that track the Bloomberg US Aggregate Bond Index is gaining the ability to invest in several different bond types, such as corporate bonds, municipal bonds, and U.S. Treasurys with a range of different maturities and duration. These can include short-term, intermediate-term, and long-term bonds all in one fund. Simplicity: The bond market can be even more complex and difficult to predict than the stock market, so bond index funds can be smart holdings for investors who want to passively invest in the U.S. bond market without doing extensive research. A total bond index can also be used as a core holding in a diversified portfolio of investments. Passive Management: Since index funds are passively managed, there is no risk that the fund manager(s) will make errors in judgment, such as poor timing or emotion-based trades, that can potentially hurt performance. Low Expenses: Because passively managed funds require less cost to manage, expenses can be kept low, which can lead to performance advantages over time. Performance: Like S&P 500 Index funds or Total Stock Market Index Funds, the index funds that track "the Agg" serve the purpose and philosophy, "If you can't beat them, join them." Note Over time, especially for periods of 10 or more years, the low costs of index funds help them to outperform most actively managed mutual funds. The Bottom Line The Bloomberg US Aggregate Index is not an investment, but there are investment securities, such as bond index mutual funds and ETFs, that track the index, enabling investors to capture the entire U.S. bond market in one fund. While index funds can be smart investments for almost any type of investor, they might not be right for everyone. As is the case with any other mutual fund or ETF purchasing decision, investors should be sure that a fund tracking the Bloomberg US Aggregate Bond Index meets their investment objectives and is suitable for their tolerance for risk. It's also wise to be sure the fund complements other holdings in a portfolio. The Balance does not provide tax, investment, or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Bloomberg. "Bloomberg Barclays US Agg Total Return Value Unhedged USD." Vanguard. "Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX)." ETF Data Base. "Bloomberg Barclays US Aggregate—ETF Tracker." Vanguard. "Does Your Index Fund Invest in You?"