The iShares Core S&P Small-Cap ETF (IJR) and the iShares National Muni Bond ETF (MUB) are both among the Top 100 ETFs. IJR is a iShares Small Blend fund and MUB is a iShares Muni National Interm fund. So, what’s the difference between IJR and MUB? And which fund is better?
The expense ratio of IJR is 0.01 percentage points lower than MUB’s (0.06% vs. 0.07%). IJR also has a high exposure to the industrials sector while MUB is mostly comprised of AA bonds. Overall, IJR has provided higher returns than MUB over the past ten years.
In this article, we’ll compare IJR vs. MUB. We’ll look at industry exposure and holdings, as well as at their performance and portfolio growth. Moreover, I’ll also discuss IJR’s and MUB’s annual returns, fund composition, and risk metrics and examine how these affect their overall returns.
|Name||iShares Core S&P Small-Cap ETF||iShares National Muni Bond ETF|
|Category||Small Blend||Muni National Interm|
The iShares Core S&P Small-Cap ETF (IJR) is a Small Blend fund that is issued by iShares. It currently has 68.64B total assets under management and has yielded an average annual return of 13.97% over the past 10 years. The fund has a dividend yield of 0.96% with an expense ratio of 0.06%.
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%.
IJR’s dividend yield is 1.00% lower than that of MUB (0.96% vs. 1.96%). Also, IJR yielded on average 9.93% more per year over the past decade (13.97% vs. 4.04%). The expense ratio of IJR is 0.01 percentage points lower than MUB’s (0.06% vs. 0.07%).
|BlackRock Cash Funds Treasury SL Agency||1.08%|
|GameStop Corp Class A||0.86%|
|Power Integrations Inc||0.57%|
|Chart Industries Inc||0.53%|
IJR’s Top Holdings are BlackRock Cash Funds Treasury SL Agency, GameStop Corp Class A, Omnicell Inc, Stamps.com Inc, and Saia Inc at 1.08%, 0.86%, 0.61%, 0.58%, and 0.57%.
Power Integrations Inc (0.57%), Exponent Inc (0.54%), and NeoGenomics Inc (0.53%) have a slightly smaller but still significant weight. Chart Industries Inc and Macy’s Inc are also represented in the IJR’s holdings at 0.53% and 0.51%.
|MUB Bond Sectors||Weight|
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.
The iShares Core S&P Small-Cap ETF (IJR) has a Standard Deviation of 18.68 with a Alpha of -3.7 and a Mean Return of 1.21. Its Treynor Ratio is 10.77 while IJR’s Beta is 1.2. Furthermore, the fund has a R-squared of 76.03 and a Sharpe Ratio of 0.74.
The iShares National Muni Bond ETF (MUB) has a R-squared of 99 with a Sharpe Ratio of 0.88 and a Beta of 1.01. Its Alpha is -0.46 while MUB’s Treynor Ratio is 3.2. Furthermore, the fund has a Standard Deviation of 3.68 and a Mean Return of 0.32.
IJR’s Mean Return is 0.89 points higher than that of MUB and its R-squared is 22.97 points lower. With a Standard Deviation of 18.68, IJR is slightly more volatile than MUB. The Alpha and Beta of IJR are 3.24 points lower and 0.19 points higher than MUB’s Alpha and Beta.
IJR had its best year in 2013 with an annual return of 41.36%. IJR’s worst year over the past decade yielded -8.43% and occurred in 2018. In most years the iShares Core S&P Small-Cap ETF provided moderate returns such as in 2020, 2017, and 2012 where annual returns amounted to 11.24%, 13.2%, and 16.28% 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.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in IJR would have resulted in a final balance of $38,800. This is a profit of $28,800 over 11 years and amounts to a compound annual growth rate (CAGR) of 13.97%.
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%.
IJR’s CAGR is 9.93 percentage points higher than that of MUB and as a result, would have yielded $23,467 more on a $10,000 investment. Thus, IJR outperformed MUB by 9.93% annually.
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