AGG ETF holders in CA, NY, CT may lose state tax break on Treasury interest due to a 50% asset rule.

California, New York, and Connecticut require that at least 50% of an ETF's assets be in U.S. government obligations for Treasury interest to be exempt from state income tax. The iShares Core U.S. Aggregate Bond ETF (AGG) currently holds about 46.76% in Treasuries, falling short of this threshold. As a result, AGG holders in these states may owe state tax on Treasury interest income, reducing the fund's tax efficiency. Investors should check AGG's year-end tax info and consider Treasury-only funds if they want to maintain the tax exemption.

The news about AGG's Treasury holdings falling short of the 50% threshold highlights a potential tax impact for investors in certain states. On Pluang, AGG trades at USD 96.38 with a slight 1-day gain of 0.23% as of Oct 31, 2026 04:21 WIB. The ETF has a market cap of $139.54 billion and a typical hold time of 52 days, with more buyers than sellers currently active at 57% buy versus 43% sell.