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MUB vs. VLUE: What’s The Difference?

The iShares National Muni Bond ETF (MUB) and the iShares MSCI USA Value Factor ETF (VLUE) are both among the Top 100 ETFs. MUB is a iShares Muni National Interm fund and VLUE is a iShares Large Value fund. So, what’s the difference between MUB and VLUE? And which fund is better?

The expense ratio of MUB is 0.08 percentage points lower than VLUE’s (0.07% vs. 0.15%). MUB is mostly comprised of AA bonds while VLUE has a high exposure to the technology sector. Overall, MUB has provided lower returns than VLUE over the past 7 years.

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

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Summary

MUBVLUE
NameiShares National Muni Bond ETFiShares MSCI USA Value Factor ETF
CategoryMuni National IntermLarge Value
IssueriSharesiShares
AUM22.71B15.95B
Avg. Return4.04%8.91%
Div. Yield1.96%1.89%
Expense Ratio0.07%0.15%

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 MSCI USA Value Factor ETF (VLUE) is a Large Value fund that is issued by iShares. It currently has 15.95B total assets under management and has yielded an average annual return of 8.91% over the past 10 years. The fund has a dividend yield of 1.89% with an expense ratio of 0.15%.

MUB’s dividend yield is 0.07% higher than that of VLUE (1.96% vs. 1.89%). Also, MUB yielded on average 4.87% less per year over the past decade (4.04% vs. 8.91%). The expense ratio of MUB is 0.08 percentage points lower than VLUE’s (0.07% vs. 0.15%).

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Fund Composition

Holdings

MUB - Holdings

MUB Bond SectorsWeight
AA60.38%
AAA18.39%
A15.04%
BBB6.0%
Others0.17%
BB0.02%
Below B0.0%
B0.0%
US Government0.0%

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.

VLUE - Holdings

VLUE HoldingsWeight
AT&T Inc7.13%
Intel Corp6.14%
General Motors Co3.19%
Micron Technology Inc3.14%
Cisco Systems Inc3.05%
International Business Machines Corp2.76%
Target Corp2.38%
Citigroup Inc2.32%
Ford Motor Co2.23%
Pfizer Inc2.17%

VLUE’s Top Holdings are AT&T Inc, Intel Corp, General Motors Co, Micron Technology Inc, and Cisco Systems Inc at 7.13%, 6.14%, 3.19%, 3.14%, and 3.05%.

International Business Machines Corp (2.76%), Target Corp (2.38%), and Citigroup Inc (2.32%) have a slightly smaller but still significant weight. Ford Motor Co and Pfizer Inc are also represented in the VLUE’s holdings at 2.23% and 2.17%.

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Risk Analysis

MUBVLUE
Mean Return0.320
R-squared990
Std. Deviation3.680
Alpha-0.460
Beta1.010
Sharpe Ratio0.880
Treynor Ratio3.20

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

The iShares MSCI USA Value Factor ETF (VLUE) has a R-squared of 0 with a Mean Return of 0 and a Standard Deviation of 0. Its Alpha is 0 while VLUE’s Sharpe Ratio is 0. Furthermore, the fund has a Beta of 0 and a Treynor Ratio of 0.

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

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Performance

Annual Returns

MUB vs. VLUE - Annual Returns

YearMUBVLUE
20204.87%-0.32%
20197.28%27.47%
20180.86%-11.18%
20174.61%21.97%
20160.06%15.68%
20152.99%-3.54%
20148.61%12.29%
2013-3.26%0.0%
20126.14%0.0%
201110.85%0.0%
20101.4%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 VLUE, returning 27.47% on an annual basis. The poorest year for VLUE in the last ten years was 2018, with a yield of -11.18%. Most years the iShares MSCI USA Value Factor ETF has given investors modest returns, such as in 2012, 2011, and 2010, when gains were 0.0%, 0.0%, and 0.0% respectively.

Portfolio Growth

MUB vs. VLUE - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
MUB$10,000$13,2854.04%
VLUE$10,000$17,2478.91%

A $10,000 investment in MUB would have resulted in a final balance of $13,285. This is a profit of $3,285 over 7 years and amounts to a compound annual growth rate (CAGR) of 4.04%.

With a $10,000 investment in VLUE, the end total would have been $17,247. This equates to a $7,247 profit over 7 years and a compound annual growth rate (CAGR) of 8.91%.

MUB’s CAGR is 4.87 percentage points lower than that of VLUE and as a result, would have yielded $3,962 less on a $10,000 investment. Thus, MUB performed worse than VLUE by 4.87% annually.


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