The iShares National Muni Bond ETF (MUB) and the iShares S&P 500 Value ETF (IVE) are both among the Top 100 ETFs. MUB is a iShares Muni National Interm fund and IVE is a iShares Large Value fund. So, what’s the difference between MUB and IVE? And which fund is better?
The expense ratio of MUB is 0.11 percentage points lower than IVE’s (0.07% vs. 0.18%). MUB is mostly comprised of AA bonds while IVE has a high exposure to the financial services sector. Overall, MUB has provided lower returns than IVE over the past 11 years.
In this article, we’ll compare MUB vs. IVE. We’ll look at fund composition and performance, as well as at their risk metrics and industry exposure. Moreover, I’ll also discuss MUB’s and IVE’s portfolio growth, annual returns, and holdings and examine how these affect their overall returns.
|Name||iShares National Muni Bond ETF||iShares S&P 500 Value ETF|
|Category||Muni National Interm||Large Value|
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 S&P 500 Value ETF (IVE) is a Large Value fund that is issued by iShares. It currently has 22.4B total assets under management and has yielded an average annual return of 11.68% over the past 10 years. The fund has a dividend yield of 1.88% with an expense ratio of 0.18%.
MUB’s dividend yield is 0.08% higher than that of IVE (1.96% vs. 1.88%). Also, MUB yielded on average 7.65% less per year over the past decade (4.04% vs. 11.68%). The expense ratio of MUB is 0.11 percentage points lower than IVE’s (0.07% vs. 0.18%).
FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).
|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.
|Berkshire Hathaway Inc Class B||3.05%|
|JPMorgan Chase & Co||2.65%|
|The Walt Disney Co||1.85%|
|Bank of America Corp||1.67%|
|Johnson & Johnson||1.57%|
|Exxon Mobil Corp||1.41%|
|Cisco Systems Inc||1.35%|
|Verizon Communications Inc||1.33%|
IVE’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, The Walt Disney Co, Bank of America Corp, and Johnson & Johnson at 3.05%, 2.65%, 1.85%, 1.67%, and 1.57%.
Exxon Mobil Corp (1.41%), Pfizer Inc (1.38%), and Cisco Systems Inc (1.35%) have a slightly smaller but still significant weight. Verizon Communications Inc and Intel Corp are also represented in the IVE’s holdings at 1.33% and 1.25%.
NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).
The iShares National Muni Bond ETF (MUB) has a Beta of 1.01 with a Mean Return of 0.32 and a Sharpe Ratio of 0.88. Its Standard Deviation is 3.68 while MUB’s R-squared is 99. Furthermore, the fund has a Alpha of -0.46 and a Treynor Ratio of 3.2.
The iShares S&P 500 Value ETF (IVE) has a Sharpe Ratio of 0.83 with a Treynor Ratio of 11.41 and a R-squared of 92.08. Its Alpha is -2.9 while IVE’s Beta is 1.01. Furthermore, the fund has a Mean Return of 1.05 and a Standard Deviation of 14.3.
MUB’s Mean Return is 0.73 points lower than that of IVE and its R-squared is 6.92 points higher. With a Standard Deviation of 3.68, MUB is slightly less volatile than IVE. The Alpha and Beta of MUB are 2.44 points higher and 0.00 points lower than IVE’s Alpha and Beta.
BTW: Uncorrelated crypto assets such as Bitcoin can serve as a hedge and mitigate risk. I've allocated around 5% of my portfolio to crypto assets through Coinbase - the simplest and cheapest broker I've found! Click here to read more (link to Coinbase).
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 IVE, returning 31.71% on an annual basis. The poorest year for IVE in the last ten years was 2018, with a yield of -9.09%. Most years the iShares S&P 500 Value ETF has given investors modest returns, such as in 2014, 2010, and 2017, when gains were 12.14%, 14.9%, and 15.19% 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 IVE, the end total would have been $31,350. This equates to a $21,350 profit over 11 years and a compound annual growth rate (CAGR) of 11.68%.
MUB’s CAGR is 7.65 percentage points lower than that of IVE and as a result, would have yielded $16,017 less on a $10,000 investment. Thus, MUB performed worse than IVE by 7.65% annually.
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
2) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
3) If you are interested in crypto, check out Coinbase. I've started allocating a small amount of assets to the growing crypto space and Coinbase has just been a breeze to use. Once you register, make sure to also open an Coinbase Pro account to buy crypto at the lowest fees on the market (just 0.1%!).
To see all of my most up-to-date recommendations, check out the Recommended Tools section.