MUB vs. EFV: What’s The Difference?

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

The expense ratio of MUB is 0.32 percentage points lower than EFV’s (0.07% vs. 0.39%). MUB is mostly comprised of AA bonds while EFV has a high exposure to the financial services sector. Overall, MUB has provided higher returns than EFV over the past 11 years.

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

Summary

MUB EFV
Name iShares National Muni Bond ETF iShares MSCI EAFE Value ETF
Category Muni National Interm Foreign Large Value
Issuer iShares iShares
AUM 22.71B 14.37B
Avg. Return 4.04% 3.99%
Div. Yield 1.96% 2.94%
Expense Ratio 0.07% 0.39%

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%.

The iShares MSCI EAFE Value ETF (EFV) is a Foreign Large Value fund that is issued by iShares. It currently has 14.37B total assets under management and has yielded an average annual return of 3.99% over the past 10 years. The fund has a dividend yield of 2.94% with an expense ratio of 0.39%.

MUB’s dividend yield is 0.98% lower than that of EFV (1.96% vs. 2.94%). Also, MUB yielded on average 0.04% more per year over the past decade (4.04% vs. 3.99%). The expense ratio of MUB is 0.32 percentage points lower than EFV’s (0.07% vs. 0.39%).

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Fund Composition

Holdings

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.

EFV - Holdings

EFV Holdings Weight
Novartis AG 2.41%
Toyota Motor Corp 2.21%
Commonwealth Bank of Australia 1.59%
Siemens AG 1.45%
Sanofi SA 1.42%
HSBC Holdings PLC 1.4%
TotalEnergies SE 1.35%
Allianz SE 1.23%
GlaxoSmithKline PLC 1.18%
Rio Tinto PLC 1.1%

EFV’s Top Holdings are Novartis AG, Toyota Motor Corp, Commonwealth Bank of Australia, Siemens AG, and Sanofi SA at 2.41%, 2.21%, 1.59%, 1.45%, and 1.42%.

HSBC Holdings PLC (1.4%), TotalEnergies SE (1.35%), and Allianz SE (1.23%) have a slightly smaller but still significant weight. GlaxoSmithKline PLC and Rio Tinto PLC are also represented in the EFV’s holdings at 1.18% and 1.1%.

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Risk Analysis

MUB EFV
Mean Return 0.32 0.42
R-squared 99 92.15
Std. Deviation 3.68 16.53
Alpha -0.46 -1.77
Beta 1.01 1.05
Sharpe Ratio 0.88 0.26
Treynor Ratio 3.2 2.92

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

The iShares MSCI EAFE Value ETF (EFV) has a Mean Return of 0.42 with a Beta of 1.05 and a Treynor Ratio of 2.92. Its Alpha is -1.77 while EFV’s R-squared is 92.15. Furthermore, the fund has a Sharpe Ratio of 0.26 and a Standard Deviation of 16.53.

MUB’s Mean Return is 0.10 points lower than that of EFV and its R-squared is 6.85 points higher. With a Standard Deviation of 3.68, MUB is slightly less volatile than EFV. The Alpha and Beta of MUB are 1.31 points higher and 0.04 points lower than EFV’s Alpha and Beta.

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Performance

Annual Returns

MUB vs. EFV - Annual Returns

Year MUB EFV
2020 4.87% -2.78%
2019 7.28% 15.97%
2018 0.86% -14.88%
2017 4.61% 21.22%
2016 0.06% 4.87%
2015 2.99% -5.89%
2014 8.61% -5.65%
2013 -3.26% 22.61%
2012 6.14% 17.52%
2011 10.85% -12.24%
2010 1.4% 3.18%

MUB had its best year in 2011 with an annual return of 10.85%. MUB’s worst year over the past decade yielded -3.26% and occurred in 2013. In most years the iShares National Muni Bond ETF provided moderate returns such as in 2015, 2017, and 2020 where annual returns amounted to 2.99%, 4.61%, and 4.87% respectively.

The year 2013 was the strongest year for EFV, returning 22.61% on an annual basis. The poorest year for EFV in the last ten years was 2018, with a yield of -14.88%. Most years the iShares MSCI EAFE Value ETF has given investors modest returns, such as in 2020, 2010, and 2016, when gains were -2.78%, 3.18%, and 4.87% respectively.

Portfolio Growth

MUB vs. EFV - Portfolio Growth

Fund Initial Balance Final Balance CAGR
MUB $10,000 $15,333 4.04%
EFV $10,000 $14,134 3.99%

A $10,000 investment in MUB would have resulted in a final balance of $15,333. This is a profit of $5,333 over 11 years and amounts to a compound annual growth rate (CAGR) of 4.04%.

With a $10,000 investment in EFV, the end total would have been $14,134. This equates to a $4,134 profit over 11 years and a compound annual growth rate (CAGR) of 3.99%.

MUB’s CAGR is 0.04 percentage points higher than that of EFV and as a result, would have yielded $1,199 more on a $10,000 investment. Thus, MUB outperformed EFV by 0.04% annually.


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