The iShares National Muni Bond ETF (MUB) and the ProShares UltraPro QQQ (TQQQ) are both among the Top 100 ETFs. MUB is a iShares Muni National Interm fund and TQQQ is a ProShares Trading–Leveraged Equity fund. So, what’s the difference between MUB and TQQQ? And which fund is better?
The expense ratio of MUB is 0.88 percentage points lower than TQQQ’s (0.07% vs. 0.95%). MUB is mostly comprised of AA bonds while TQQQ has a high exposure to the technology sector. Overall, MUB has provided lower returns than TQQQ over the past 10 years.
In this article, we’ll compare MUB vs. TQQQ. We’ll look at risk metrics and portfolio growth, as well as at their holdings and annual returns. Moreover, I’ll also discuss MUB’s and TQQQ’s fund composition, industry exposure, and performance and examine how these affect their overall returns.
|Name||iShares National Muni Bond ETF||ProShares UltraPro QQQ|
|Category||Muni National Interm||Trading–Leveraged Equity|
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 ProShares UltraPro QQQ (TQQQ) is a Trading–Leveraged Equity fund that is issued by ProShares. It currently has 12.41B total assets under management and has yielded an average annual return of 61.22% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.95%.
MUB’s dividend yield is 1.96% higher than that of TQQQ (1.96% vs. 0.0%). Also, MUB yielded on average 57.18% less per year over the past decade (4.04% vs. 61.22%). The expense ratio of MUB is 0.88 percentage points lower than TQQQ’s (0.07% vs. 0.95%).
|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.
|Nasdaq 100 Index Swap Goldman Sachs International||45.11%|
|Nasdaq 100 Index Swap Societe Generale||44.73%|
|Nasdaq 100 Index Swap Bnp Paribas||38.05%|
|Nasdaq 100 Index Swap Bank Of America Na||31.53%|
|Nasdaq 100 Index Swap Citibank Na||31.49%|
|Nasdaq 100 Index Swap Jp Morgan Securities||26.2%|
|Nasdaq 100 Index Swap Credit Suisse International||5.9%|
TQQQ’s Top Holdings are Nasdaq 100 Index Swap Goldman Sachs International, Nasdaq 100 Index Swap Societe Generale, Nasdaq 100 Index Swap Bnp Paribas, Nasdaq 100 Index Swap Bank Of America Na, and Nasdaq 100 Index Swap Citibank Na at 45.11%, 44.73%, 38.05%, 31.53%, and 31.49%.
Nasdaq 100 Index Swap Jp Morgan Securities (26.2%), Apple Inc (7.49%), and Microsoft Corp (6.69%) have a slightly smaller but still significant weight. Nasdaq 100 Index Swap Credit Suisse International and Amazon.com Inc are also represented in the TQQQ’s holdings at 5.9% and 5.68%.
The iShares National Muni Bond ETF (MUB) has a Sharpe Ratio of 0.88 with a Treynor Ratio of 3.2 and a Standard Deviation of 3.68. Its R-squared is 99 while MUB’s Alpha is -0.46. Furthermore, the fund has a Mean Return of 0.32 and a Beta of 1.01.
The ProShares UltraPro QQQ (TQQQ) has a Standard Deviation of 50.08 with a Alpha of 7.29 and a Beta of 3.37. Its Sharpe Ratio is 1.1 while TQQQ’s Treynor Ratio is 15.65. Furthermore, the fund has a R-squared of 83.64 and a Mean Return of 4.65.
MUB’s Mean Return is 4.33 points lower than that of TQQQ and its R-squared is 15.36 points higher. With a Standard Deviation of 3.68, MUB is slightly less volatile than TQQQ. The Alpha and Beta of MUB are 7.75 points lower and 2.36 points lower than TQQQ’s Alpha and Beta.
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 TQQQ, returning 139.98% on an annual basis. The poorest year for TQQQ in the last ten years was 2018, with a yield of -19.65%. Most years the ProShares UltraPro QQQ has given investors modest returns, such as in 2015, 2012, and 2014, when gains were 17.41%, 51.95%, and 56.82% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in MUB would have resulted in a final balance of $15,121. This is a profit of $5,121 over 10 years and amounts to a compound annual growth rate (CAGR) of 4.04%.
With a $10,000 investment in TQQQ, the end total would have been $593,012. This equates to a $583,012 profit over 10 years and a compound annual growth rate (CAGR) of 61.22%.
MUB’s CAGR is 57.18 percentage points lower than that of TQQQ and as a result, would have yielded $577,891 less on a $10,000 investment. Thus, MUB performed worse than TQQQ by 57.18% annually.
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