The iShares Core S&P Total U.S. Stock Market ETF (ITOT) and the iShares National Muni Bond ETF (MUB) are both among the Top 100 ETFs. ITOT is a iShares Large Blend fund and MUB is a iShares Muni National Interm fund. So, what’s the difference between ITOT and MUB? And which fund is better?
The expense ratio of ITOT is 0.04 percentage points lower than MUB’s (0.03% vs. 0.07%). ITOT also has a high exposure to the technology sector while MUB is mostly comprised of AA bonds. Overall, ITOT has provided higher returns than MUB over the past ten years.
In this article, we’ll compare ITOT vs. MUB. We’ll look at holdings and annual returns, as well as at their industry exposure and performance. Moreover, I’ll also discuss ITOT’s and MUB’s risk metrics, portfolio growth, and fund composition and examine how these affect their overall returns.
Summary
| ITOT | MUB | |
| Name | iShares Core S&P Total U.S. Stock Market ETF | iShares National Muni Bond ETF |
| Category | Large Blend | Muni National Interm |
| Issuer | iShares | iShares |
| AUM | 41.97B | 22.71B |
| Avg. Return | 14.59% | 4.04% |
| Div. Yield | 1.2% | 1.96% |
| Expense Ratio | 0.03% | 0.07% |
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) is a Large Blend fund that is issued by iShares. It currently has 41.97B total assets under management and has yielded an average annual return of 14.59% over the past 10 years. The fund has a dividend yield of 1.2% with an expense ratio of 0.03%.
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%.
ITOT’s dividend yield is 0.76% lower than that of MUB (1.2% vs. 1.96%). Also, ITOT yielded on average 10.55% more per year over the past decade (14.59% vs. 4.04%). The expense ratio of ITOT is 0.04 percentage points lower than MUB’s (0.03% vs. 0.07%).
Fund Composition
Holdings
| ITOT Holdings | Weight |
| Apple Inc | 5.07% |
| Microsoft Corp | 4.75% |
| Amazon.com Inc | 3.16% |
| Facebook Inc Class A | 1.89% |
| Alphabet Inc Class A | 1.79% |
| Alphabet Inc Class C | 1.71% |
| Tesla Inc | 1.17% |
| Berkshire Hathaway Inc Class B | 1.17% |
| NVIDIA Corp | 1.08% |
| JPMorgan Chase & Co | 1.02% |
ITOT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.07%, 4.75%, 3.16%, 1.89%, and 1.79%.
Alphabet Inc Class C (1.71%), Tesla Inc (1.17%), and Berkshire Hathaway Inc Class B (1.17%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the ITOT’s holdings at 1.08% and 1.02%.
| 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
| ITOT | MUB | |
| Mean Return | 1.27 | 0.32 |
| R-squared | 99.4 | 99 |
| Std. Deviation | 14.02 | 3.68 |
| Alpha | -0.54 | -0.46 |
| Beta | 1.03 | 1.01 |
| Sharpe Ratio | 1.04 | 0.88 |
| Treynor Ratio | 14.13 | 3.2 |
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a R-squared of 99.4 with a Beta of 1.03 and a Treynor Ratio of 14.13. Its Alpha is -0.54 while ITOT’s Mean Return is 1.27. Furthermore, the fund has a Standard Deviation of 14.02 and a Sharpe Ratio of 1.04.
The iShares National Muni Bond ETF (MUB) has a Standard Deviation of 3.68 with a Alpha of -0.46 and a Sharpe Ratio of 0.88. Its R-squared is 99 while MUB’s Treynor Ratio is 3.2. Furthermore, the fund has a Beta of 1.01 and a Mean Return of 0.32.
ITOT’s Mean Return is 0.95 points higher than that of MUB and its R-squared is 0.40 points higher. With a Standard Deviation of 14.02, ITOT is slightly more volatile than MUB. The Alpha and Beta of ITOT are 0.08 points lower and 0.02 points higher than MUB’s Alpha and Beta.
Performance
Annual Returns
| Year | ITOT | MUB |
| 2020 | 20.75% | 4.87% |
| 2019 | 30.87% | 7.28% |
| 2018 | -5.27% | 0.86% |
| 2017 | 21.23% | 4.61% |
| 2016 | 12.59% | 0.06% |
| 2015 | 0.96% | 2.99% |
| 2014 | 13.01% | 8.61% |
| 2013 | 32.67% | -3.26% |
| 2012 | 15.98% | 6.14% |
| 2011 | 1.55% | 10.85% |
| 2010 | 16.15% | 1.4% |
ITOT had its best year in 2013 with an annual return of 32.67%. ITOT’s worst year over the past decade yielded -5.27% and occurred in 2018. In most years the iShares Core S&P Total U.S. Stock Market ETF provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 13.01%, 15.98%, and 16.15% 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 |
| ITOT | $10,000 | $42,310 | 14.59% |
| MUB | $10,000 | $15,333 | 4.04% |
A $10,000 investment in ITOT would have resulted in a final balance of $42,310. This is a profit of $32,310 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.59%.
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%.
ITOT’s CAGR is 10.55 percentage points higher than that of MUB and as a result, would have yielded $26,977 more on a $10,000 investment. Thus, ITOT outperformed MUB by 10.55% annually.
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