The iShares National Muni Bond ETF (MUB) and the iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) are both among the Top 100 ETFs. MUB is a iShares Muni National Interm fund and EMB is a iShares Emerging Markets Bond fund. So, what’s the difference between MUB and EMB? And which fund is better?
The expense ratio of MUB is 0.32 percentage points lower than EMB’s (0.07% vs. 0.39%). MUB is mostly comprised of AA bonds and EMB has a high exposure to BBB bond. Overall, MUB has provided lower returns than EMB over the past 11 years.
In this article, we’ll compare MUB vs. EMB. We’ll look at industry exposure and performance, as well as at their risk metrics and fund composition. Moreover, I’ll also discuss MUB’s and EMB’s holdings, portfolio growth, and annual returns and examine how these affect their overall returns.
|Name||iShares National Muni Bond ETF||iShares J.P. Morgan USD Emerging Markets Bond ETF|
|Category||Muni National Interm||Emerging Markets Bond|
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 J.P. Morgan USD Emerging Markets Bond ETF (EMB) is a Emerging Markets Bond fund that is issued by iShares. It currently has 19.76B total assets under management and has yielded an average annual return of 6.43% over the past 10 years. The fund has a dividend yield of 3.85% with an expense ratio of 0.39%.
MUB’s dividend yield is 1.89% lower than that of EMB (1.96% vs. 3.85%). Also, MUB yielded on average 2.40% less per year over the past decade (4.04% vs. 6.43%). The expense ratio of MUB is 0.32 percentage points lower than EMB’s (0.07% vs. 0.39%).
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|MUB Bond Sectors||Weight|
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.
|EMB Bond Sectors||Weight|
EMB’s Top Bond Sectors are ratings of BBB, B, BB, A, and AA at 33.79%, 21.97%, 16.92%, 13.67%, and 7.97%. The fund is less weighted towards Below B (4.49%), Others (1.11%), and AAA (0.09%) rated bonds.
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The iShares National Muni Bond ETF (MUB) has a Standard Deviation of 3.68 with a R-squared of 99 and a Sharpe Ratio of 0.88. Its Alpha is -0.46 while MUB’s Treynor Ratio is 3.2. Furthermore, the fund has a Beta of 1.01 and a Mean Return of 0.32.
The iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) has a R-squared of 23.34 with a Treynor Ratio of 3.24 and a Sharpe Ratio of 0.55. Its Beta is 1.36 while EMB’s Standard Deviation is 8.44. Furthermore, the fund has a Mean Return of 0.44 and a Alpha of 0.89.
MUB’s Mean Return is 0.12 points lower than that of EMB and its R-squared is 75.66 points higher. With a Standard Deviation of 3.68, MUB is slightly less volatile than EMB. The Alpha and Beta of MUB are 1.35 points lower and 0.35 points lower than EMB’s Alpha and Beta.
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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 2012 was the strongest year for EMB, returning 17.64% on an annual basis. The poorest year for EMB in the last ten years was 2013, with a yield of -7.42%. Most years the iShares J.P. Morgan USD Emerging Markets Bond ETF has given investors modest returns, such as in 2014, 2011, and 2016, when gains were 6.69%, 7.2%, and 9.41% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 EMB, the end total would have been $19,295. This equates to a $9,295 profit over 11 years and a compound annual growth rate (CAGR) of 6.43%.
MUB’s CAGR is 2.40 percentage points lower than that of EMB and as a result, would have yielded $3,962 less on a $10,000 investment. Thus, MUB performed worse than EMB by 2.40% annually.
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