The iShares Core MSCI Emerging Markets ETF (IEMG) and the iShares National Muni Bond ETF (MUB) are both among the Top 100 ETFs. IEMG is a iShares Diversified Emerging Mkts fund and MUB is a iShares Muni National Interm fund. So, what’s the difference between IEMG and MUB? And which fund is better?
The expense ratio of IEMG is 0.04 percentage points higher than MUB’s (0.11% vs. 0.07%). IEMG also has a high exposure to the technology sector while MUB is mostly comprised of AA bonds. Overall, IEMG has provided higher returns than MUB over the past ten years.
In this article, we’ll compare IEMG vs. MUB. We’ll look at risk metrics and fund composition, as well as at their annual returns and industry exposure. Moreover, I’ll also discuss IEMG’s and MUB’s holdings, performance, and portfolio growth and examine how these affect their overall returns.
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Summary
| IEMG | MUB | |
| Name | iShares Core MSCI Emerging Markets ETF | iShares National Muni Bond ETF |
| Category | Diversified Emerging Mkts | Muni National Interm |
| Issuer | iShares | iShares |
| AUM | 83.68B | 22.71B |
| Avg. Return | 7.41% | 4.04% |
| Div. Yield | 1.78% | 1.96% |
| Expense Ratio | 0.11% | 0.07% |
The iShares Core MSCI Emerging Markets ETF (IEMG) is a Diversified Emerging Mkts fund that is issued by iShares. It currently has 83.68B total assets under management and has yielded an average annual return of 7.41% over the past 10 years. The fund has a dividend yield of 1.78% with an expense ratio of 0.11%.
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%.
IEMG’s dividend yield is 0.18% lower than that of MUB (1.78% vs. 1.96%). Also, IEMG yielded on average 3.37% more per year over the past decade (7.41% vs. 4.04%). The expense ratio of IEMG is 0.04 percentage points higher than MUB’s (0.11% vs. 0.07%).
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Fund Composition
Holdings
| IEMG Holdings | Weight |
| Taiwan Semiconductor Manufacturing Co Ltd | 5.37% |
| Tencent Holdings Ltd | 4.42% |
| Alibaba Group Holding Ltd Ordinary Shares | 4.38% |
| Samsung Electronics Co Ltd | 3.49% |
| Meituan | 1.52% |
| Naspers Ltd Class N | 0.93% |
| Vale SA | 0.91% |
| Reliance Industries Ltd Shs Dematerialised | 0.83% |
| China Construction Bank Corp Class H | 0.77% |
| Infosys Ltd | 0.74% |
IEMG’s Top Holdings are Taiwan Semiconductor Manufacturing Co Ltd, Tencent Holdings Ltd, Alibaba Group Holding Ltd Ordinary Shares, Samsung Electronics Co Ltd, and Meituan at 5.37%, 4.42%, 4.38%, 3.49%, and 1.52%.
Naspers Ltd Class N (0.93%), Vale SA (0.91%), and Reliance Industries Ltd Shs Dematerialised (0.83%) have a slightly smaller but still significant weight. China Construction Bank Corp Class H and Infosys Ltd are also represented in the IEMG’s holdings at 0.77% and 0.74%.
| 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.
Risk Analysis
| IEMG | MUB | |
| Mean Return | 0 | 0.32 |
| R-squared | 0 | 99 |
| Std. Deviation | 0 | 3.68 |
| Alpha | 0 | -0.46 |
| Beta | 0 | 1.01 |
| Sharpe Ratio | 0 | 0.88 |
| Treynor Ratio | 0 | 3.2 |
The iShares Core MSCI Emerging Markets ETF (IEMG) has a Treynor Ratio of 0 with a R-squared of 0 and a Sharpe Ratio of 0. Its Beta is 0 while IEMG’s Mean Return is 0. Furthermore, the fund has a Alpha of 0 and a Standard Deviation of 0.
The iShares National Muni Bond ETF (MUB) has a Standard Deviation of 3.68 with a R-squared of 99 and a Treynor Ratio of 3.2. Its Mean Return is 0.32 while MUB’s Alpha is -0.46. Furthermore, the fund has a Sharpe Ratio of 0.88 and a Beta of 1.01.
IEMG’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, IEMG is slightly less volatile than MUB. The Alpha and Beta of IEMG are 0.46 points higher and 1.01 points lower than MUB’s Alpha and Beta.
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Performance
Annual Returns
| Year | IEMG | MUB |
| 2020 | 18.18% | 4.87% |
| 2019 | 17.5% | 7.28% |
| 2018 | -14.69% | 0.86% |
| 2017 | 36.78% | 4.61% |
| 2016 | 9.98% | 0.06% |
| 2015 | -13.86% | 2.99% |
| 2014 | -2.04% | 8.61% |
| 2013 | -2.16% | -3.26% |
| 2012 | 0.0% | 6.14% |
| 2011 | 0.0% | 10.85% |
| 2010 | 0.0% | 1.4% |
IEMG had its best year in 2017 with an annual return of 36.78%. IEMG’s worst year over the past decade yielded -14.69% and occurred in 2018. In most years the iShares Core MSCI Emerging Markets ETF provided moderate returns such as in 2012, 2011, and 2010 where annual returns amounted to 0.0%, 0.0%, and 0.0% 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
| Fund | Initial Balance | Final Balance | CAGR |
| IEMG | $10,000 | $15,037 | 7.41% |
| MUB | $10,000 | $13,285 | 4.04% |
A $10,000 investment in IEMG would have resulted in a final balance of $15,037. This is a profit of $5,037 over 7 years and amounts to a compound annual growth rate (CAGR) of 7.41%.
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%.
IEMG’s CAGR is 3.37 percentage points higher than that of MUB and as a result, would have yielded $1,752 more on a $10,000 investment. Thus, IEMG outperformed MUB by 3.37% annually.
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