The iShares Russell 1000 ETF (IWB) and the iShares National Muni Bond ETF (MUB) are both among the Top 100 ETFs. IWB is a iShares Large Blend fund and MUB is a iShares Muni National Interm fund. So, what’s the difference between IWB and MUB? And which fund is better?
The expense ratio of IWB is 0.08 percentage points higher than MUB’s (0.15% vs. 0.07%). IWB also has a high exposure to the technology sector while MUB is mostly comprised of AA bonds. Overall, IWB has provided higher returns than MUB over the past ten years.
In this article, we’ll compare IWB vs. MUB. We’ll look at holdings and industry exposure, as well as at their fund composition and risk metrics. Moreover, I’ll also discuss IWB’s and MUB’s performance, portfolio growth, and annual returns and examine how these affect their overall returns.
Summary
| IWB | MUB | |
| Name | iShares Russell 1000 ETF | iShares National Muni Bond ETF |
| Category | Large Blend | Muni National Interm |
| Issuer | iShares | iShares |
| AUM | 30.54B | 22.71B |
| Avg. Return | 14.64% | 4.04% |
| Div. Yield | 1.14% | 1.96% |
| Expense Ratio | 0.15% | 0.07% |
The iShares Russell 1000 ETF (IWB) is a Large Blend fund that is issued by iShares. It currently has 30.54B total assets under management and has yielded an average annual return of 14.64% over the past 10 years. The fund has a dividend yield of 1.14% with an expense ratio of 0.15%.
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%.
IWB’s dividend yield is 0.82% lower than that of MUB (1.14% vs. 1.96%). Also, IWB yielded on average 10.60% more per year over the past decade (14.64% vs. 4.04%). The expense ratio of IWB is 0.08 percentage points higher than MUB’s (0.15% vs. 0.07%).
Fund Composition
Holdings
| IWB Holdings | Weight |
| Apple Inc | 5.45% |
| Microsoft Corp | 5.11% |
| Amazon.com Inc | 3.43% |
| Facebook Inc Class A | 2.03% |
| Alphabet Inc Class A | 1.93% |
| Alphabet Inc Class C | 1.82% |
| Tesla Inc | 1.27% |
| Berkshire Hathaway Inc Class B | 1.24% |
| NVIDIA Corp | 1.11% |
| JPMorgan Chase & Co | 1.09% |
IWB’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.45%, 5.11%, 3.43%, 2.03%, and 1.93%.
Alphabet Inc Class C (1.82%), Tesla Inc (1.27%), and Berkshire Hathaway Inc Class B (1.24%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the IWB’s holdings at 1.11% and 1.09%.
| 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
| IWB | MUB | |
| Mean Return | 1.27 | 0.32 |
| R-squared | 99.73 | 99 |
| Std. Deviation | 13.87 | 3.68 |
| Alpha | -0.38 | -0.46 |
| Beta | 1.02 | 1.01 |
| Sharpe Ratio | 1.05 | 0.88 |
| Treynor Ratio | 14.31 | 3.2 |
The iShares Russell 1000 ETF (IWB) has a Mean Return of 1.27 with a R-squared of 99.73 and a Treynor Ratio of 14.31. Its Beta is 1.02 while IWB’s Sharpe Ratio is 1.05. Furthermore, the fund has a Alpha of -0.38 and a Standard Deviation of 13.87.
The iShares National Muni Bond ETF (MUB) has a Mean Return of 0.32 with a Sharpe Ratio of 0.88 and a Standard Deviation of 3.68. Its Alpha is -0.46 while MUB’s Beta is 1.01. Furthermore, the fund has a Treynor Ratio of 3.2 and a R-squared of 99.
IWB’s Mean Return is 0.95 points higher than that of MUB and its R-squared is 0.73 points higher. With a Standard Deviation of 13.87, IWB is slightly more volatile than MUB. The Alpha and Beta of IWB are 0.08 points higher and 0.01 points higher than MUB’s Alpha and Beta.
Performance
Annual Returns
| Year | IWB | MUB |
| 2020 | 20.8% | 4.87% |
| 2019 | 31.26% | 7.28% |
| 2018 | -4.91% | 0.86% |
| 2017 | 21.53% | 4.61% |
| 2016 | 11.91% | 0.06% |
| 2015 | 0.82% | 2.99% |
| 2014 | 13.08% | 8.61% |
| 2013 | 32.93% | -3.26% |
| 2012 | 16.27% | 6.14% |
| 2011 | 1.36% | 10.85% |
| 2010 | 15.94% | 1.4% |
IWB had its best year in 2013 with an annual return of 32.93%. IWB’s worst year over the past decade yielded -4.91% and occurred in 2018. In most years the iShares Russell 1000 ETF provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.08%, 15.94%, and 16.27% 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 |
| IWB | $10,000 | $42,462 | 14.64% |
| MUB | $10,000 | $15,333 | 4.04% |
A $10,000 investment in IWB would have resulted in a final balance of $42,462. This is a profit of $32,462 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.64%.
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%.
IWB’s CAGR is 10.60 percentage points higher than that of MUB and as a result, would have yielded $27,129 more on a $10,000 investment. Thus, IWB outperformed MUB by 10.60% annually.
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