IUSB is on track to overtake AGG as the default core bond ETF
As seen on the 24/7 Wall St. homepage on September 25, 2026.
The default core bond holding is quietly changing hands: Bloomberg's ETF analyst says IUSB has pulled in double AGG's flows year to date and ranks third across all fixed income.
Wrote today about how The Universal Bond Index ETF $IUSB should and will pass $AGG in asset by end of decade. It has doubled AGG's flows YTD and is 3rd overall in FI flows. Investors discovering what we've been saying for a while- it's arguably a better core holding bc it has a https://t.co/ieTbmZRRLj
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Bloomberg ETF analyst Eric Balchunas made the case on September 25 that the iShares Core Total USD Bond Market ETF should pass the iShares Core U.S. Aggregate Bond ETF in total assets by the end of the decade, a shift that would effectively hand the crown of the default core bond holding to a newer challenger.
The flow data is already moving in that direction. IUSB has pulled in double AGG's year-to-date flows, and ranks third across all fixed income ETFs in flows overall, a signal that institutional and retail allocators are actively repositioning rather than simply inheriting legacy exposure.
Balchunas framed the thesis as something he and others have argued for some time: IUSB is arguably a better core holding than AGG, though the tweet cuts off before the full reasoning is visible. The flow numbers, however, suggest the investment community is arriving at the same conclusion on its own.
For investors, the practical question is whether their bond allocation still defaults to AGG out of habit or inertia. If IUSB is genuinely capturing the bulk of new fixed income money, the gap in assets between the two funds will narrow steadily, and the liquidity and ecosystem advantages AGG has long enjoyed will compress alongside it.