IWR vs. MUB: What’s The Difference?

The iShares Russell Mid-Cap ETF (IWR) and the iShares National Muni Bond ETF (MUB) are both among the Top 100 ETFs. IWR is a iShares Mid-Cap Blend fund and MUB is a iShares Muni National Interm fund. So, what’s the difference between IWR and MUB? And which fund is better?

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

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

Summary

IWR MUB
Name iShares Russell Mid-Cap ETF iShares National Muni Bond ETF
Category Mid-Cap Blend Muni National Interm
Issuer iShares iShares
AUM 29.84B 22.71B
Avg. Return 14.15% 4.04%
Div. Yield 0.99% 1.96%
Expense Ratio 0.19% 0.07%

The iShares Russell Mid-Cap ETF (IWR) is a Mid-Cap Blend fund that is issued by iShares. It currently has 29.84B total assets under management and has yielded an average annual return of 14.15% over the past 10 years. The fund has a dividend yield of 0.99% 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%.

IWR’s dividend yield is 0.97% lower than that of MUB (0.99% vs. 1.96%). Also, IWR yielded on average 10.11% more per year over the past decade (14.15% vs. 4.04%). The expense ratio of IWR is 0.12 percentage points higher than MUB’s (0.19% vs. 0.07%).

Fund Composition

Holdings

IWR - Holdings

IWR Holdings Weight
IDEXX Laboratories Inc 0.51%
DocuSign Inc 0.51%
Twitter Inc 0.48%
Chipotle Mexican Grill Inc 0.47%
Roku Inc Class A 0.44%
Marvell Technology Inc 0.44%
DexCom Inc 0.44%
Trane Technologies PLC 0.43%
MSCI Inc 0.43%
Carrier Global Corp Ordinary Shares 0.43%

IWR’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Twitter Inc, Chipotle Mexican Grill Inc, and Roku Inc Class A at 0.51%, 0.51%, 0.48%, 0.47%, and 0.44%.

Marvell Technology Inc (0.44%), DexCom Inc (0.44%), and Trane Technologies PLC (0.43%) have a slightly smaller but still significant weight. MSCI Inc and Carrier Global Corp Ordinary Shares are also represented in the IWR’s holdings at 0.43% and 0.43%.

MUB - Holdings

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

IWR MUB
Mean Return 1.17 0.32
R-squared 91.52 99
Std. Deviation 15.66 3.68
Alpha -2.8 -0.46
Beta 1.11 1.01
Sharpe Ratio 0.86 0.88
Treynor Ratio 11.72 3.2

The iShares Russell Mid-Cap ETF (IWR) has a R-squared of 91.52 with a Sharpe Ratio of 0.86 and a Standard Deviation of 15.66. Its Alpha is -2.8 while IWR’s Beta is 1.11. Furthermore, the fund has a Mean Return of 1.17 and a Treynor Ratio of 11.72.

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

IWR’s Mean Return is 0.85 points higher than that of MUB and its R-squared is 7.48 points lower. With a Standard Deviation of 15.66, IWR is slightly more volatile than MUB. The Alpha and Beta of IWR are 2.34 points lower and 0.10 points higher than MUB’s Alpha and Beta.

Performance

Annual Returns

IWR vs. MUB - Annual Returns

Year IWR MUB
2020 16.91% 4.87%
2019 30.31% 7.28%
2018 -9.13% 0.86%
2017 18.32% 4.61%
2016 13.58% 0.06%
2015 -2.57% 2.99%
2014 13.03% 8.61%
2013 34.5% -3.26%
2012 17.13% 6.14%
2011 -1.67% 10.85%
2010 25.25% 1.4%

IWR had its best year in 2013 with an annual return of 34.5%. IWR’s worst year over the past decade yielded -9.13% and occurred in 2018. In most years the iShares Russell Mid-Cap ETF provided moderate returns such as in 2016, 2020, and 2012 where annual returns amounted to 13.58%, 16.91%, and 17.13% 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

IWR vs. MUB - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWR $10,000 $39,751 14.15%
MUB $10,000 $15,333 4.04%

A $10,000 investment in IWR would have resulted in a final balance of $39,751. This is a profit of $29,751 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.15%.

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%.

IWR’s CAGR is 10.11 percentage points higher than that of MUB and as a result, would have yielded $24,418 more on a $10,000 investment. Thus, IWR outperformed MUB by 10.11% annually.


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