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IWD vs. MUB: What’s The Difference?

The iShares Russell 1000 Value ETF (IWD) and the iShares National Muni Bond ETF (MUB) are both among the Top 100 ETFs. IWD is a iShares Large Value fund and MUB is a iShares Muni National Interm fund. So, what’s the difference between IWD and MUB? And which fund is better?

The expense ratio of IWD is 0.12 percentage points higher than MUB’s (0.19% vs. 0.07%). IWD also has a high exposure to the financial services sector while MUB is mostly comprised of AA bonds. Overall, IWD has provided higher returns than MUB over the past ten years.

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

Summary

IWDMUB
NameiShares Russell 1000 Value ETFiShares National Muni Bond ETF
CategoryLarge ValueMuni National Interm
IssueriSharesiShares
AUM54.1B22.71B
Avg. Return11.40%4.04%
Div. Yield1.57%1.96%
Expense Ratio0.19%0.07%

The iShares Russell 1000 Value ETF (IWD) is a Large Value fund that is issued by iShares. It currently has 54.1B total assets under management and has yielded an average annual return of 11.40% over the past 10 years. The fund has a dividend yield of 1.57% with an expense ratio of 0.19%.

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%.

IWD’s dividend yield is 0.39% lower than that of MUB (1.57% vs. 1.96%). Also, IWD yielded on average 7.36% more per year over the past decade (11.40% vs. 4.04%). The expense ratio of IWD is 0.12 percentage points higher than MUB’s (0.19% vs. 0.07%).

Fund Composition

Holdings

IWD - Holdings

IWD HoldingsWeight
Berkshire Hathaway Inc Class B2.58%
JPMorgan Chase & Co2.25%
Johnson & Johnson2.24%
UnitedHealth Group Inc1.78%
Procter & Gamble Co1.71%
The Walt Disney Co1.5%
Bank of America Corp1.43%
Comcast Corp Class A1.33%
Exxon Mobil Corp1.2%
Pfizer Inc1.18%

IWD’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, Johnson & Johnson, UnitedHealth Group Inc, and Procter & Gamble Co at 2.58%, 2.25%, 2.24%, 1.78%, and 1.71%.

The Walt Disney Co (1.5%), Bank of America Corp (1.43%), and Comcast Corp Class A (1.33%) have a slightly smaller but still significant weight. Exxon Mobil Corp and Pfizer Inc are also represented in the IWD’s holdings at 1.2% and 1.18%.

MUB - Holdings

MUB Bond SectorsWeight
AA60.38%
AAA18.39%
A15.04%
BBB6.0%
Others0.17%
BB0.02%
Below B0.0%
B0.0%
US Government0.0%

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

IWDMUB
Mean Return1.030.32
R-squared92.3899
Std. Deviation14.353.68
Alpha-3.23-0.46
Beta1.021.01
Sharpe Ratio0.810.88
Treynor Ratio11.063.2

The iShares Russell 1000 Value ETF (IWD) has a R-squared of 92.38 with a Beta of 1.02 and a Treynor Ratio of 11.06. Its Standard Deviation is 14.35 while IWD’s Alpha is -3.23. Furthermore, the fund has a Sharpe Ratio of 0.81 and a Mean Return of 1.03.

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

IWD’s Mean Return is 0.71 points higher than that of MUB and its R-squared is 6.62 points lower. With a Standard Deviation of 14.35, IWD is slightly more volatile than MUB. The Alpha and Beta of IWD are 2.77 points lower and 0.01 points higher than MUB’s Alpha and Beta.

Performance

Annual Returns

IWD vs. MUB - Annual Returns

YearIWDMUB
20202.67%4.87%
201926.34%7.28%
2018-8.4%0.86%
201713.47%4.61%
201617.09%0.06%
2015-3.95%2.99%
201413.21%8.61%
201332.18%-3.26%
201217.28%6.14%
20110.21%10.85%
201015.3%1.4%

IWD had its best year in 2013 with an annual return of 32.18%. IWD’s worst year over the past decade yielded -8.4% and occurred in 2018. In most years the iShares Russell 1000 Value ETF provided moderate returns such as in 2014, 2017, and 2010 where annual returns amounted to 13.21%, 13.47%, and 15.3% 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

IWD vs. MUB - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IWD$10,000$30,74611.40%
MUB$10,000$15,3334.04%

A $10,000 investment in IWD would have resulted in a final balance of $30,746. This is a profit of $20,746 over 11 years and amounts to a compound annual growth rate (CAGR) of 11.40%.

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%.

IWD’s CAGR is 7.36 percentage points higher than that of MUB and as a result, would have yielded $15,413 more on a $10,000 investment. Thus, IWD outperformed MUB by 7.36% annually.


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