The iShares National Muni Bond ETF (MUB) and the Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) are both among the Top 100 ETFs. MUB is a iShares Muni National Interm fund and VOE is a Vanguard Mid-Cap Value fund. So, what’s the difference between MUB and VOE? And which fund is better?
MUB and VOE have the same expense ratio: 0.07%. MUB is mostly comprised of AA bonds while VOE has a high exposure to the financial services sector. Overall, MUB has provided lower returns than VOE over the past 11 years.
In this article, we’ll compare MUB vs. VOE. We’ll look at industry exposure and risk metrics, as well as at their holdings and performance. Moreover, I’ll also discuss MUB’s and VOE’s portfolio growth, annual returns, and fund composition and examine how these affect their overall returns.
|Name||iShares National Muni Bond ETF||Vanguard Mid-Cap Value Index Fund ETF Shares|
|Category||Muni National Interm||Mid-Cap 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 Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) is a Mid-Cap Value fund that is issued by Vanguard. It currently has 26.78B total assets under management and has yielded an average annual return of 12.52% over the past 10 years. The fund has a dividend yield of 1.87% with an expense ratio of 0.07%.
MUB’s dividend yield is 0.09% higher than that of VOE (1.96% vs. 1.87%). Also, MUB yielded on average 8.49% less per year over the past decade (4.04% vs. 12.52%). MUB and VOE have the same expense ratio: 0.07%.
|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.
|Carrier Global Corp Ordinary Shares||1.28%|
|International Flavors & Fragrances Inc||1.13%|
|Motorola Solutions Inc||1.12%|
|Discover Financial Services||1.09%|
|Valero Energy Corp||0.97%|
|Willis Towers Watson PLC||0.9%|
|D.R. Horton Inc||0.89%|
VOE’s Top Holdings are Carrier Global Corp Ordinary Shares, International Flavors & Fragrances Inc, Motorola Solutions Inc, Discover Financial Services, and Welltower Inc at 1.28%, 1.13%, 1.12%, 1.09%, and 1.05%.
Corteva Inc (0.99%), Valero Energy Corp (0.97%), and Corning Inc (0.95%) have a slightly smaller but still significant weight. Willis Towers Watson PLC and D.R. Horton Inc are also represented in the VOE’s holdings at 0.9% and 0.89%.
The iShares National Muni Bond ETF (MUB) has a Mean Return of 0.32 with a Alpha of -0.46 and a Sharpe Ratio of 0.88. Its Beta is 1.01 while MUB’s R-squared is 99. Furthermore, the fund has a Standard Deviation of 3.68 and a Treynor Ratio of 3.2.
The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has a Standard Deviation of 15.98 with a Treynor Ratio of 10.19 and a Beta of 1.11. Its Sharpe Ratio is 0.75 while VOE’s R-squared is 88.76. Furthermore, the fund has a Mean Return of 1.05 and a Alpha of -3.77.
MUB’s Mean Return is 0.73 points lower than that of VOE and its R-squared is 10.24 points higher. With a Standard Deviation of 3.68, MUB is slightly less volatile than VOE. The Alpha and Beta of MUB are 3.31 points higher and 0.10 points lower than VOE’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 VOE, returning 37.65% on an annual basis. The poorest year for VOE in the last ten years was 2018, with a yield of -12.41%. Most years the Vanguard Mid-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2016, and 2012, when gains were 13.98%, 15.26%, and 16.04% 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 VOE, the end total would have been $33,655. This equates to a $23,655 profit over 11 years and a compound annual growth rate (CAGR) of 12.52%.
MUB’s CAGR is 8.49 percentage points lower than that of VOE and as a result, would have yielded $18,322 less on a $10,000 investment. Thus, MUB performed worse than VOE by 8.49% annually.
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