IAU vs. MUB: What’s The Difference?

The iShares Gold Trust (IAU) and the iShares National Muni Bond ETF (MUB) are both among the Top 100 ETFs. IAU is a iShares N/A fund and MUB is a iShares Muni National Interm fund. So, what’s the difference between IAU and MUB? And which fund is better?

The expense ratio of IAU is 0.18 percentage points higher than MUB’s (0.25% vs. 0.07%). IAU also has a high exposure to the technology sector while MUB is mostly comprised of AA bonds. Overall, IAU has provided higher returns than MUB over the past 11 years.

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

Summary

IAU MUB
Name iShares Gold Trust iShares National Muni Bond ETF
Category N/A Muni National Interm
Issuer iShares iShares
AUM 28.61B 22.71B
Avg. Return 6.03% 4.04%
Div. Yield 0.0% 1.96%
Expense Ratio 0.25% 0.07%

The iShares Gold Trust (IAU) is a N/A fund that is issued by iShares. It currently has 28.61B total assets under management and has yielded an average annual return of 6.03% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.25%.

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%.

IAU’s dividend yield is 1.96% lower than that of MUB (0.0% vs. 1.96%). Also, IAU yielded on average 1.99% more per year over the past decade (6.03% vs. 4.04%). The expense ratio of IAU is 0.18 percentage points higher than MUB’s (0.25% vs. 0.07%).

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Fund Composition

Holdings

IAU - Holdings

IAU Holdings Weight
Gold 100.0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%

IAU’s Top Holdings are Gold, N/A, N/A, N/A, and N/A at 100.0%, 0%, 0%, 0%, and 0%.

N/A (0%), N/A (0%), and N/A (0%) have a slightly smaller but still significant weight. N/A and N/A are also represented in the IAU’s holdings at 0% and 0%.

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

IAU MUB
Mean Return 0.23 0.32
R-squared 16.03 99
Std. Deviation 16.97 3.68
Alpha 4.16 -0.46
Beta 0.48 1.01
Sharpe Ratio 0.13 0.88
Treynor Ratio 1.5 3.2

The iShares Gold Trust (IAU) has a Mean Return of 0.23 with a Standard Deviation of 16.97 and a R-squared of 16.03. Its Alpha is 4.16 while IAU’s Treynor Ratio is 1.5. Furthermore, the fund has a Beta of 0.48 and a Sharpe Ratio of 0.13.

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

IAU’s Mean Return is 0.09 points lower than that of MUB and its R-squared is 82.97 points lower. With a Standard Deviation of 16.97, IAU is slightly more volatile than MUB. The Alpha and Beta of IAU are 4.62 points higher and 0.53 points lower than MUB’s Alpha and Beta.

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Performance

Annual Returns

IAU vs. MUB - Annual Returns

Year IAU MUB
2020 23.86% 4.87%
2019 18.54% 7.28%
2018 -1.39% 0.86%
2017 11.58% 4.61%
2016 8.85% 0.06%
2015 -11.65% 2.99%
2014 -0.44% 8.61%
2013 -27.96% -3.26%
2012 8.37% 6.14%
2011 8.66% 10.85%
2010 27.93% 1.4%

IAU had its best year in 2010 with an annual return of 27.93%. IAU’s worst year over the past decade yielded -27.96% and occurred in 2013. In most years the iShares Gold Trust provided moderate returns such as in 2012, 2011, and 2016 where annual returns amounted to 8.37%, 8.66%, and 8.85% 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

IAU vs. MUB - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IAU $10,000 $16,786 6.03%
MUB $10,000 $15,333 4.04%

A $10,000 investment in IAU would have resulted in a final balance of $16,786. This is a profit of $6,786 over 11 years and amounts to a compound annual growth rate (CAGR) of 6.03%.

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%.

IAU’s CAGR is 1.99 percentage points higher than that of MUB and as a result, would have yielded $1,453 more on a $10,000 investment. Thus, IAU outperformed MUB by 1.99% annually.


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