Bloomberg US Aggregate Bond Index

Currency. Principal and interest must be in US dollars.

Credit rating. A security must be investment grade, Baa3/BBB-/BBB- or higher, using the middle rating of Moody's, S&P and Fitch. Other rules cover two-agency, one-agency and unrated cases.

Minimum liquidity. Treasury, government-related and corporate securities must have three hundred million dollars par outstanding. Mortgage-backed securities must have one billion dollars at the cohort level. Asset-backed securities must have a five hundred million dollar deal size at issuance and a twenty-five million dollar tranche size. Commercial mortgage-backed securities must have a five hundred million dollar deal size at issuance and three hundred million dollars outstanding remaining in the deal.

Maturity. A security must have at least one year to final maturity. Mortgage-backed securities must have a weighted average maturity of at least one year, and commercial mortgage-backed securities and asset-backed securities must have a remaining average life of at least one year. Bonds that convert from fixed to floating rate will exit the index one year prior to conversion. Fixed-rate perpetuals are not included.

Market of issue. Securities and Exchange Commission-registered, exempt-at-issuance and 144A securities with registration rights qualify. Global bonds are included.

Seniority. Senior and subordinated issues are included.

Included security types. The included security types include bullets, putables, sinkables, callables, taxable municipals, original-issue zeros, fixed and fixed-to-float capital securities, and covered bonds.

Excluded security types. The excluded security types include contingent capital, equity-type features, tax-exempt municipals, inflation-linked and floating-rate issues, private placements, retail bonds, structured notes, and illiquid securities with no available internal or third-party pricing source.

Treasury holdings. New issues bought at auction by the Federal Reserve do not enter the index.

Other indices. Provided the necessary inclusion rules are met, US Aggregate-eligible securities also contribute to the multi-currency Global Aggregate Index and the US Universal Index.

The summary prospectus of the iShares Core U.S. Aggregate Bond ETF, dated June 29, 2026, adds that a security in the index must be denominated in U.S. dollars and must be fixed-rate, non-convertible and taxable.

Credit Quality and the Index Rating

In the Bloomberg fixed income index methodology dated January 8, 2026, investment grade is Baa3/BBB- or higher. The index rating uses the middle of the Moody's, S&P and Fitch ratings, which works as a two-out-of-three rule. With only two ratings, the lower one applies. With one rating, that rating applies. Expected ratings, issuer ratings and sovereign ratings can fill gaps when bond-level ratings are missing. US Agencies are assigned the same rating as US Treasuries. US MBS pass-throughs are assigned the US government rating for all agencies.

Broad-based investment grade indices, such as the US Aggregate, do not have a country of risk criterion. Fixed-to-floating rate perpetuals are included in the indices until one year prior to their conversion to floating-rate or coupon reset. New and/or existing debt issued by entities placed on relevant lists are considered restricted and are not eligible for Bloomberg Indices. Relevant lists and regulations include, but are not limited to, the Specially Designated Nationals and Blocked Persons list of the Office of Foreign Assets Control. Defaulted bonds from corporate issuers are not eligible for Bloomberg indices.

Sectors of the Index

The Bloomberg fixed income index methodology places eligible bonds in one of four broad categories: Treasury, government-related, corporate and securitized.

Both nominal and inflation-linked native currency government debt is classified within the treasury sector. The Bloomberg US Aggregate Index document dated June 12, 2024 lists inflation-linked issues among the excluded security types.

The government-related sector includes Agencies, Sovereign, Supranational and Local Authority issuers. The government-related sector groups all issuers with government affiliations into a single category. Entities that are less than 50 percent government owned are classified in the appropriate corporate bucket, unless the entity fits the definition of government sponsored. In the US market, taxable municipal bonds, including Build America Bonds, fall into the Local Authority category of the government-related sector.

The corporate sector is categorized into three broad categories at the second level: Industrial, Financial Institutions and Utilities.

The securitized sector covers MBS Pass-Through, ABS, CMBS and Covered securities. For MBS pass-throughs, only agency issuers are eligible for the indices.

History of the Minimum Issue Size

The Bloomberg Barclays Methodology records the following history of the minimum size.

January 1986: inception of the US Aggregate Index with a one million dollar minimum.

April 1988: the minimum was raised from one million dollars to twenty-five million dollars.

January 1990: the minimum was raised from twenty-five million dollars to one hundred million dollars for government bonds only.

January 1992: the non-government minimum was raised from twenty-five million dollars to fifty million dollars.

January 1994: the non-government minimum was raised from fifty million dollars to one hundred million dollars.

July 1999: the minimum was raised from one hundred million dollars to one hundred fifty million dollars for all sectors.

October 2003: the minimum was raised from one hundred fifty million dollars to two hundred million dollars.

July 2004: the minimum was raised from two hundred million dollars to two hundred fifty million dollars.

April 1, 2014: the MBS minimum was raised from two hundred fifty million dollars to one billion dollars, and the non-MBS minimum remained at two hundred fifty million dollars.

April 1, 2017: the minimum was raised from two hundred fifty million dollars to three hundred million dollars for non-securitized bonds, and the US Aggregate minimum amount outstanding was increased to match that of the Global Aggregate Index.

Origins and Ownership of the Index

The index platform was part of Lehman Brothers, and Barclays subsequently acquired it in 2008. In 1986, the Government/Credit Index was expanded to include Mortgage Backed Securities, renamed the US Aggregate Index, and backfilled with data to 1976. On August 24, 2016, Bloomberg acquired these assets from Barclays Bank PLC, and the two firms co-branded the indices as the Bloomberg Barclays Indices for a five-year term.

How the Index Is Designed

The Bloomberg Barclays Methodology, in its April 29, 2020 version, lists four benchmark index design principles. The index is representative of the market or asset class being measured and the desired risk exposures sought by index users. The index is replicable, offering a sufficiently sized universe without unnecessary turnover and transaction costs. The index is objective and transparent, with clearly defined and objective rules. The index is relevant as an investment benchmark for a diverse set of index uses. The methodology adds that Bloomberg Barclays benchmarks are rules-based, objective and transparent.

The methodology poses three fundamental design questions. What investment universe is the index trying to measure? How are the risk and return characteristics of eligible securities measured? How are security-level returns and risk characteristics weighted and aggregated to the index level?

Par amount outstanding is seen as a measure of relative liquidity. The index rating of each bond is assigned a numeric value from 2 to 24, and the constituents' numeric ratings are market value weighted to arrive at the aggregate average quality for the index.

Rebalancing and Monthly Updates

The index rebalances on the last business day of each month. A defaulted security that regains eligibility may become eligible at the next month-end rebalancing.

Treasury purchases and sales by the Federal Reserve are reflected weekly, typically on Fridays, using NY Fed data, and updates are frozen for the last three business days of the month. A paydown return is estimated for MBS generics on the first business day of each month, using the prior month's paydown data, and then updated on the 8th business day to reflect actual prepayments.

Securities that are fully called exit the index at their call price. Partial calls adjust the amount outstanding, and the bond stays in the index if it still meets all rules. For a sinkable bond, a paydown return is recorded in months with a sinking payment, and the amount outstanding is adjusted. For a pay-in-kind security, the amount outstanding rises by the pay-in-kind bonds issued, and a coupon return is recognized in the payment month only.

For widely used benchmark indices, the index flag for a security falling below the one-year maturity minimum is updated on the first day of the month. A defaulted corporate bond continues to be priced until month-end, at which time it exits the index. For a defaulted corporate bond, accrued interest is set to zero, reversing out any accrual posted since the last coupon payment.

Uses of the Index as a Benchmark

In the Understanding Portfolio Uses section of the Bloomberg Barclays Methodology, Bloomberg tends to observe three common uses for fixed income indices. The most common is as a baseline performance target or benchmark for active or passive bond portfolios. Indices are often used as informational measures of market performance and risk characteristics. Finally, indices are used as a reference target for passive investment strategies and index-linked products.

The investor insights article Get Off the Bench: A Look at Benchmarks, on the website of the Financial Industry Regulatory Authority, known as FINRA, names the Bloomberg U.S. Aggregate Bond Index as a bond benchmark. In that article, benchmarks are indexes or averages that track a particular stock market or market segment, it is important to choose the appropriate benchmark as a point of comparison, and a fund's quarterly report will often tell you what specific index the fund is benchmarked against. Short-term comparisons can be skewed by one-time events, and there is no guarantee that a benchmark, or an investment you are evaluating, will perform similarly in the future.

Under Item 4(b)(2)(iii) of Form N-1A, the table of average annual total returns also should show the returns of an appropriate broad-based securities market index. The index row of the table is labeled Index, with the notation that it reflects no deduction for fees, expenses, or taxes.

A Fund That Tracks the Index

The iShares Core U.S. Aggregate Bond ETF seeks to track the investment results of the Bloomberg U.S. Aggregate Bond Index. In the summary prospectus dated June 29, 2026, the Bloomberg U.S. Aggregate Bond Index measures the performance of the total U.S. investment-grade bond market, and the underlying index is market capitalization-weighted. The underlying index includes investment-grade U.S. Treasury bonds, government-related bonds, corporate bonds, mortgage-backed pass-through securities, commercial mortgage-backed securities and asset-backed securities that are publicly offered for sale in the U.S.

The fund uses a representative sampling indexing strategy, which involves investing in a representative sample of securities or other instruments that collectively has an investment profile similar to that of an applicable underlying index. The fund will invest at least 80 percent of its assets in the component securities of the underlying index and in to-be-announced transactions, known as TBAs, that have economic characteristics that are substantially identical to the economic characteristics of the component securities of the underlying index. The underlying index is sponsored by Bloomberg, which is independent of the fund and its investment adviser, and the securities in the underlying index are updated on the last business day of each month.

The summary prospectus lists the following principal risks. Interest rate risk refers to the risk of fluctuations in the value of a fixed-income security due to changes in the general level of interest rates, and an increase in interest rates generally will cause the value of fixed-income securities to decline. Securities with longer maturities generally are more sensitive to interest rate changes and subject to greater fluctuations in value. Credit risk is the risk that an issuer, guarantor or liquidity provider of a fixed-income security may be unable or unwilling, or may be perceived as unable or unwilling, to make timely principal and/or interest payments or to otherwise honor its obligations. Prepayment risk arises during periods of falling interest rates, when issuers of certain debt obligations may repay principal prior to the debt obligation's maturity, which may cause the fund to have to reinvest in instruments with lower yields or a higher risk of default. Call risk arises when, during periods of falling interest rates, an issuer of a callable debt obligation may call or repay the debt obligation before its stated maturity.

Tracking error is the divergence of the fund's performance from that of the underlying index. Tracking error may occur due to differences between the securities held in the fund's portfolio and those included in the underlying index, and due to transaction costs and other expenses incurred by the fund that the underlying index does not incur. Index-related risk includes the possibility that errors in index data, index computations or the construction of the underlying index may occur and that the index provider may not identify or correct them promptly or at all.

Exam Relevance

The Securities Industry Essentials examination content outline lists Benchmarks and indices as the sixth topic of Topic 3.1.2, Investment Returns, under 3.1, Trading, Settlement and Corporate Actions, in Section 3, Understanding Trading, Customer Accounts and Prohibited Activities. Topic 3.1.2 lists components of return, with interest, dividends, realized/unrealized gains and return on capital named in parentheses; different types of dividends, with cash and stock named in parentheses; dividend payment dates, with record date, ex-dividend date and payable date named in parentheses; concepts of measurement, with yield, yield to maturity, yield to call, total return and basis points named in parentheses; cost basis requirements; and benchmarks and indices. The outline does not name the Bloomberg US Aggregate Bond Index. Candidates should check the current outline before the examination.

Common Misunderstandings

The index holds only Treasuries. The index covers Treasuries, government-related and corporate securities, and securitized assets.

The index holds high-yield bonds. A security must be investment grade, Baa3/BBB-/BBB- or higher, to be eligible.

Every municipal bond is eligible. Tax-exempt municipals are excluded, and taxable municipals are included.

Inflation-linked and floating-rate bonds are eligible. The excluded security types include inflation-linked and floating-rate issues.

The index never changes. The index rebalances on the last business day of each month, and the minimum size of eligible securities was raised from one million dollars at inception in January 1986 to three hundred million dollars for non-securitized bonds on April 1, 2017.

A fund that tracks the index earns the index return. Tracking error is the divergence of the fund's performance from that of the underlying index, and transaction costs and other expenses incurred by the fund are not incurred by the underlying index.

The fund controls the index. The underlying index is sponsored by Bloomberg, which is independent of the fund and its investment adviser.

Key Points to Retain

The Bloomberg US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market.

The index covers Treasuries, government-related and corporate securities, and securitized assets.

A security must be investment grade, Baa3/BBB-/BBB- or higher, using the middle rating of Moody's, S&P and Fitch.

The index rebalances on the last business day of each month.

The Securities Industry Essentials examination content outline lists Benchmarks and indices in Topic 3.1.2, Investment Returns.