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BNDX vs. MUB: What’s The Difference?

The Vanguard Total International Bond Index Fund ETF Shares (BNDX) and the iShares National Muni Bond ETF (MUB) are both among the Top 100 ETFs. BNDX is a Vanguard N/A fund and MUB is a iShares Muni National Interm fund. So, what’s the difference between BNDX and MUB? And which fund is better?

The expense ratio of BNDX is 0.01 percentage points higher than MUB’s (0.08% vs. 0.07%). BNDX is mostly comprised of A bonds and MUB has a high exposure to AA bond. Overall, BNDX has provided higher returns than MUB over the past ten years.

In this article, we’ll compare BNDX vs. MUB. We’ll look at holdings and industry exposure, as well as at their performance and portfolio growth. Moreover, I’ll also discuss BNDX’s and MUB’s risk metrics, fund composition, and annual returns and examine how these affect their overall returns.

Introduction To Mutual Funds
Introduction To Mutual Funds
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Summary

BNDXMUB
NameVanguard Total International Bond Index Fund ETF SharesiShares National Muni Bond ETF
CategoryN/AMuni National Interm
IssuerVanguardiShares
AUM116.41B22.71B
Avg. Return4.63%4.04%
Div. Yield0.94%1.96%
Expense Ratio0.08%0.07%

The Vanguard Total International Bond Index Fund ETF Shares (BNDX) is a N/A fund that is issued by Vanguard. It currently has 116.41B total assets under management and has yielded an average annual return of 4.63% over the past 10 years. The fund has a dividend yield of 0.94% with an expense ratio of 0.08%.

The iShares National Muni Bond ETF (MUB) is a Muni National Interm fund that is issued by iShares. It currently has 22.71B total assets under management and has yielded an average annual return of 4.04% over the past 10 years. The fund has a dividend yield of 1.96% with an expense ratio of 0.07%.

BNDX’s dividend yield is 1.02% lower than that of MUB (0.94% vs. 1.96%). Also, BNDX yielded on average 0.59% more per year over the past decade (4.63% vs. 4.04%). The expense ratio of BNDX is 0.01 percentage points higher than MUB’s (0.08% vs. 0.07%).

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Fund Composition

Holdings

BNDX - Holdings

BNDX Bond SectorsWeight
A29.19%
AA26.79%
AAA21.59%
BBB19.41%
Others1.57%
Below B1.45%
B0.0%
BB0.0%
US Government0.0%

BNDX’s Top Bond Sectors are ratings of A, AA, AAA, BBB, and Others at 29.19%, 26.79%, 21.59%, 19.41%, and 1.57%. The fund is less weighted towards Below B (1.45%), B (0.0%), and BB (0.0%) rated bonds.

MUB - Holdings

MUB Bond SectorsWeight
AA60.38%
AAA18.39%
A15.04%
BBB6.0%
Others0.17%
BB0.02%
Below B0.0%
B0.0%
US Government0.0%

MUB’s Top Bond Sectors are ratings of AA, AAA, A, BBB, and Others at 60.38%, 18.39%, 15.04%, 6.0%, and 0.17%. The fund is less weighted towards BB (0.02%), Below B (0.0%), and B (0.0%) rated bonds.

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Risk Analysis

BNDXMUB
Mean Return00.32
R-squared099
Std. Deviation03.68
Alpha0-0.46
Beta01.01
Sharpe Ratio00.88
Treynor Ratio03.2

The Vanguard Total International Bond Index Fund ETF Shares (BNDX) has a Standard Deviation of 0 with a Mean Return of 0 and a Treynor Ratio of 0. Its Sharpe Ratio is 0 while BNDX’s R-squared is 0. Furthermore, the fund has a Alpha of 0 and a Beta of 0.

The iShares National Muni Bond ETF (MUB) has a R-squared of 99 with a Beta of 1.01 and a Standard Deviation of 3.68. Its Mean Return is 0.32 while MUB’s Treynor Ratio is 3.2. Furthermore, the fund has a Sharpe Ratio of 0.88 and a Alpha of -0.46.

BNDX’s Mean Return is 0.32 points lower than that of MUB and its R-squared is 99.00 points lower. With a Standard Deviation of 0, BNDX is slightly less volatile than MUB. The Alpha and Beta of BNDX are 0.46 points higher and 1.01 points lower than MUB’s Alpha and Beta.

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Performance

Annual Returns

BNDX vs. MUB - Annual Returns

YearBNDXMUB
20204.6%4.87%
20197.88%7.28%
20182.94%0.86%
20172.4%4.61%
20164.67%0.06%
20151.08%2.99%
20148.83%8.61%
20130.0%-3.26%
20120.0%6.14%
20110.0%10.85%
20100.0%1.4%

BNDX had its best year in 2014 with an annual return of 8.83%. BNDX’s worst year over the past decade yielded 0.0% and occurred in 2013. In most years the Vanguard Total International Bond Index Fund ETF Shares provided moderate returns such as in 2015, 2017, and 2018 where annual returns amounted to 1.08%, 2.4%, and 2.94% respectively.

The year 2011 was the strongest year for MUB, returning 10.85% on an annual basis. The poorest year for MUB in the last ten years was 2013, with a yield of -3.26%. Most years the iShares National Muni Bond ETF has given investors modest returns, such as in 2015, 2017, and 2020, when gains were 2.99%, 4.61%, and 4.87% respectively.

Portfolio Growth

BNDX vs. MUB - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
BNDX$10,000$13,6954.63%
MUB$10,000$13,2854.04%

A $10,000 investment in BNDX would have resulted in a final balance of $13,695. This is a profit of $3,695 over 7 years and amounts to a compound annual growth rate (CAGR) of 4.63%.

With a $10,000 investment in MUB, the end total would have been $13,285. This equates to a $3,285 profit over 7 years and a compound annual growth rate (CAGR) of 4.04%.

BNDX’s CAGR is 0.59 percentage points higher than that of MUB and as a result, would have yielded $410 more on a $10,000 investment. Thus, BNDX outperformed MUB by 0.59% annually.


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