DIA vs. MUB: What’s The Difference?

The SPDR Dow Jones Industrial Average ETF Trust (DIA) and the iShares National Muni Bond ETF (MUB) are both among the Top 100 ETFs. DIA is a SPDR State Street Global Advisors Large Value fund and MUB is a iShares Muni National Interm fund. So, what’s the difference between DIA and MUB? And which fund is better?

The expense ratio of DIA is 0.09 percentage points higher than MUB’s (0.16% vs. 0.07%). DIA also has a high exposure to the financial services sector while MUB is mostly comprised of AA bonds. Overall, DIA has provided higher returns than MUB over the past 11 years.

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

Summary

DIA MUB
Name SPDR Dow Jones Industrial Average ETF Trust iShares National Muni Bond ETF
Category Large Value Muni National Interm
Issuer SPDR State Street Global Advisors iShares
AUM 30.46B 22.71B
Avg. Return 13.35% 4.04%
Div. Yield 1.61% 1.96%
Expense Ratio 0.16% 0.07%

The SPDR Dow Jones Industrial Average ETF Trust (DIA) is a Large Value fund that is issued by SPDR State Street Global Advisors. It currently has 30.46B total assets under management and has yielded an average annual return of 13.35% over the past 10 years. The fund has a dividend yield of 1.61% with an expense ratio of 0.16%.

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%.

DIA’s dividend yield is 0.35% lower than that of MUB (1.61% vs. 1.96%). Also, DIA yielded on average 9.32% more per year over the past decade (13.35% vs. 4.04%). The expense ratio of DIA is 0.09 percentage points higher than MUB’s (0.16% vs. 0.07%).

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Fund Composition

Holdings

DIA - Holdings

DIA Holdings Weight
UnitedHealth Group Inc 7.63%
Goldman Sachs Group Inc 7.23%
The Home Depot Inc 6.07%
Microsoft Corp 5.16%
Salesforce.com Inc 4.65%
Amgen Inc 4.64%
Boeing Co 4.56%
Visa Inc Class A 4.45%
McDonald’s Corp 4.4%
Honeywell International Inc 4.18%

DIA’s Top Holdings are UnitedHealth Group Inc, Goldman Sachs Group Inc, The Home Depot Inc, Microsoft Corp, and Salesforce.com Inc at 7.63%, 7.23%, 6.07%, 5.16%, and 4.65%.

Amgen Inc (4.64%), Boeing Co (4.56%), and Visa Inc Class A (4.45%) have a slightly smaller but still significant weight. McDonald’s Corp and Honeywell International Inc are also represented in the DIA’s holdings at 4.4% and 4.18%.

MUB - Holdings

MUB Bond Sectors Weight
AA 60.38%
AAA 18.39%
A 15.04%
BBB 6.0%
Others 0.17%
BB 0.02%
Below B 0.0%
B 0.0%
US Government 0.0%

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

DIA MUB
Mean Return 1.13 0.32
R-squared 93.31 99
Std. Deviation 13.68 3.68
Alpha -0.94 -0.46
Beta 0.97 1.01
Sharpe Ratio 0.94 0.88
Treynor Ratio 13.07 3.2

The SPDR Dow Jones Industrial Average ETF Trust (DIA) has a Treynor Ratio of 13.07 with a Beta of 0.97 and a Alpha of -0.94. Its R-squared is 93.31 while DIA’s Mean Return is 1.13. Furthermore, the fund has a Sharpe Ratio of 0.94 and a Standard Deviation of 13.68.

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

DIA’s Mean Return is 0.81 points higher than that of MUB and its R-squared is 5.69 points lower. With a Standard Deviation of 13.68, DIA is slightly more volatile than MUB. The Alpha and Beta of DIA are 0.48 points lower and 0.04 points lower than MUB’s Alpha and Beta.

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Performance

Annual Returns

DIA vs. MUB - Annual Returns

Year DIA MUB
2020 9.63% 4.87%
2019 25.09% 7.28%
2018 -3.6% 0.86%
2017 27.97% 4.61%
2016 16.28% 0.06%
2015 0.1% 2.99%
2014 9.88% 8.61%
2013 29.41% -3.26%
2012 10.04% 6.14%
2011 8.21% 10.85%
2010 13.87% 1.4%

DIA had its best year in 2013 with an annual return of 29.41%. DIA’s worst year over the past decade yielded -3.6% and occurred in 2018. In most years the SPDR Dow Jones Industrial Average ETF Trust provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 9.88%, 10.04%, and 13.87% 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

DIA vs. MUB - Portfolio Growth

Fund Initial Balance Final Balance CAGR
DIA $10,000 $37,965 13.35%
MUB $10,000 $15,333 4.04%

A $10,000 investment in DIA would have resulted in a final balance of $37,965. This is a profit of $27,965 over 11 years and amounts to a compound annual growth rate (CAGR) of 13.35%.

With a $10,000 investment in MUB, the end total would have been $15,333. This equates to a $5,333 profit over 11 years and a compound annual growth rate (CAGR) of 4.04%.

DIA’s CAGR is 9.32 percentage points higher than that of MUB and as a result, would have yielded $22,632 more on a $10,000 investment. Thus, DIA outperformed MUB by 9.32% annually.


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