MUB vs. IWP: What’s The Difference?

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

The expense ratio of MUB is 0.17 percentage points lower than IWP’s (0.07% vs. 0.24%). MUB is mostly comprised of AA bonds while IWP has a high exposure to the technology sector. Overall, MUB has provided lower returns than IWP over the past 11 years.

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

Summary

MUB IWP
Name iShares National Muni Bond ETF iShares Russell Mid-Cap Growth ETF
Category Muni National Interm Mid-Cap Growth
Issuer iShares iShares
AUM 22.71B 15.7B
Avg. Return 4.04% 16.75%
Div. Yield 1.96% 0.26%
Expense Ratio 0.07% 0.24%

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 Russell Mid-Cap Growth ETF (IWP) is a Mid-Cap Growth fund that is issued by iShares. It currently has 15.7B total assets under management and has yielded an average annual return of 16.75% over the past 10 years. The fund has a dividend yield of 0.26% with an expense ratio of 0.24%.

MUB’s dividend yield is 1.70% higher than that of IWP (1.96% vs. 0.26%). Also, MUB yielded on average 12.71% less per year over the past decade (4.04% vs. 16.75%). The expense ratio of MUB is 0.17 percentage points lower than IWP’s (0.07% vs. 0.24%).

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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.

IWP - Holdings

IWP Holdings Weight
IDEXX Laboratories Inc 1.3%
DocuSign Inc 1.3%
Roku Inc Class A 1.29%
Match Group Inc 1.06%
Chipotle Mexican Grill Inc 1.06%
Pinterest Inc 1.05%
Veeva Systems Inc Class A 1.04%
Palantir Technologies Inc Ordinary Shares – Class A 1.04%
Lululemon Athletica Inc 1.01%
DexCom Inc 1.0%

IWP’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Roku Inc Class A, Match Group Inc, and Chipotle Mexican Grill Inc at 1.3%, 1.3%, 1.29%, 1.06%, and 1.06%.

Pinterest Inc (1.05%), Veeva Systems Inc Class A (1.04%), and Palantir Technologies Inc Ordinary Shares – Class A (1.04%) have a slightly smaller but still significant weight. Lululemon Athletica Inc and DexCom Inc are also represented in the IWP’s holdings at 1.01% and 1.0%.

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Risk Analysis

MUB IWP
Mean Return 0.32 1.27
R-squared 99 87.01
Std. Deviation 3.68 16.05
Alpha -0.46 -1.03
Beta 1.01 1.1
Sharpe Ratio 0.88 0.91
Treynor Ratio 3.2 12.98

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

The iShares Russell Mid-Cap Growth ETF (IWP) has a Sharpe Ratio of 0.91 with a Treynor Ratio of 12.98 and a Beta of 1.1. Its Alpha is -1.03 while IWP’s R-squared is 87.01. Furthermore, the fund has a Standard Deviation of 16.05 and a Mean Return of 1.27.

MUB’s Mean Return is 0.95 points lower than that of IWP and its R-squared is 11.99 points higher. With a Standard Deviation of 3.68, MUB is slightly less volatile than IWP. The Alpha and Beta of MUB are 0.57 points higher and 0.09 points lower than IWP’s Alpha and Beta.

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Performance

Annual Returns

MUB vs. IWP - Annual Returns

Year MUB IWP
2020 4.87% 35.29%
2019 7.28% 35.14%
2018 0.86% -4.95%
2017 4.61% 24.98%
2016 0.06% 7.15%
2015 2.99% -0.39%
2014 8.61% 11.68%
2013 -3.26% 35.44%
2012 6.14% 15.62%
2011 10.85% -1.82%
2010 1.4% 26.1%

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 IWP, returning 35.44% on an annual basis. The poorest year for IWP in the last ten years was 2018, with a yield of -4.95%. Most years the iShares Russell Mid-Cap Growth ETF has given investors modest returns, such as in 2014, 2012, and 2017, when gains were 11.68%, 15.62%, and 24.98% respectively.

Portfolio Growth

MUB vs. IWP - Portfolio Growth

Fund Initial Balance Final Balance CAGR
MUB $10,000 $15,333 4.04%
IWP $10,000 $50,191 16.75%

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 IWP, the end total would have been $50,191. This equates to a $40,191 profit over 11 years and a compound annual growth rate (CAGR) of 16.75%.

MUB’s CAGR is 12.71 percentage points lower than that of IWP and as a result, would have yielded $34,858 less on a $10,000 investment. Thus, MUB performed worse than IWP by 12.71% annually.


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