MUB vs. IUSB: What’s The Difference?

The iShares National Muni Bond ETF (MUB) and the iShares Core Total USD Bond Market ETF (IUSB) are both among the Top 100 ETFs. MUB is a iShares Muni National Interm fund and IUSB is a iShares N/A fund. So, what’s the difference between MUB and IUSB? And which fund is better?

The expense ratio of MUB is 0.01 percentage points higher than IUSB’s (0.07% vs. 0.06%). MUB is mostly comprised of AA bonds and IUSB has a high exposure to AAA bond. Overall, MUB has provided lower returns than IUSB over the past 6 years.

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

Summary

MUB IUSB
Name iShares National Muni Bond ETF iShares Core Total USD Bond Market ETF
Category Muni National Interm N/A
Issuer iShares iShares
AUM 22.71B 14.49B
Avg. Return 4.04% 4.13%
Div. Yield 1.96% 2.1%
Expense Ratio 0.07% 0.06%

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 Core Total USD Bond Market ETF (IUSB) is a N/A fund that is issued by iShares. It currently has 14.49B total assets under management and has yielded an average annual return of 4.13% over the past 10 years. The fund has a dividend yield of 2.1% with an expense ratio of 0.06%.

MUB’s dividend yield is 0.14% lower than that of IUSB (1.96% vs. 2.1%). Also, MUB yielded on average 0.09% less per year over the past decade (4.04% vs. 4.13%). The expense ratio of MUB is 0.01 percentage points higher than IUSB’s (0.07% vs. 0.06%).

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.

IUSB - Holdings

IUSB Bond Sectors Weight
AAA 58.32%
BBB 16.98%
A 12.27%
BB 4.33%
AA 3.36%
B 2.8%
Others 1.01%
Below B 0.92%
US Government 0.0%

IUSB’s Top Bond Sectors are ratings of AAA, BBB, A, BB, and AA at 58.32%, 16.98%, 12.27%, 4.33%, and 3.36%. The fund is less weighted towards B (2.8%), Others (1.01%), and Below B (0.92%) rated bonds.

Risk Analysis

MUB IUSB
Mean Return 0.32 0
R-squared 99 0
Std. Deviation 3.68 0
Alpha -0.46 0
Beta 1.01 0
Sharpe Ratio 0.88 0
Treynor Ratio 3.2 0

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

The iShares Core Total USD Bond Market ETF (IUSB) has a Mean Return of 0 with a R-squared of 0 and a Beta of 0. Its Sharpe Ratio is 0 while IUSB’s Standard Deviation is 0. Furthermore, the fund has a Alpha of 0 and a Treynor Ratio of 0.

MUB’s Mean Return is 0.32 points higher than that of IUSB and its R-squared is 99.00 points higher. With a Standard Deviation of 3.68, MUB is slightly more volatile than IUSB. The Alpha and Beta of MUB are 0.46 points lower and 1.01 points higher than IUSB’s Alpha and Beta.

Performance

Annual Returns

MUB vs. IUSB - Annual Returns

Year MUB IUSB
2020 4.87% 7.59%
2019 7.28% 9.26%
2018 0.86% -0.38%
2017 4.61% 4.06%
2016 0.06% 3.78%
2015 2.99% 0.46%
2014 8.61% 0.0%
2013 -3.26% 0.0%
2012 6.14% 0.0%
2011 10.85% 0.0%
2010 1.4% 0.0%

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 2019 was the strongest year for IUSB, returning 9.26% on an annual basis. The poorest year for IUSB in the last ten years was 2018, with a yield of -0.38%. Most years the iShares Core Total USD Bond Market ETF has given investors modest returns, such as in 2011, 2010, and 2015, when gains were 0.0%, 0.0%, and 0.46% respectively.

Portfolio Growth

MUB vs. IUSB - Portfolio Growth

Fund Initial Balance Final Balance CAGR
MUB $10,000 $12,232 4.04%
IUSB $10,000 $12,704 4.13%

A $10,000 investment in MUB would have resulted in a final balance of $12,232. This is a profit of $2,232 over 6 years and amounts to a compound annual growth rate (CAGR) of 4.04%.

With a $10,000 investment in IUSB, the end total would have been $12,704. This equates to a $2,704 profit over 6 years and a compound annual growth rate (CAGR) of 4.13%.

MUB’s CAGR is 0.09 percentage points lower than that of IUSB and as a result, would have yielded $472 less on a $10,000 investment. Thus, MUB performed worse than IUSB by 0.09% annually.


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