The Schwab International Equity ETF (SCHF) and the iShares National Muni Bond ETF (MUB) are both among the Top 100 ETFs. SCHF is a Schwab ETFs Foreign Large Blend fund and MUB is a iShares Muni National Interm fund. So, what’s the difference between SCHF and MUB? And which fund is better?
The expense ratio of SCHF is 0.01 percentage points lower than MUB’s (0.06% vs. 0.07%). SCHF also has a high exposure to the financial services sector while MUB is mostly comprised of AA bonds. Overall, SCHF has provided higher returns than MUB over the past 10 years.
In this article, we’ll compare SCHF vs. MUB. We’ll look at annual returns and performance, as well as at their industry exposure and risk metrics. Moreover, I’ll also discuss SCHF’s and MUB’s fund composition, portfolio growth, and holdings and examine how these affect their overall returns.
|Name||Schwab International Equity ETF||iShares National Muni Bond ETF|
|Category||Foreign Large Blend||Muni National Interm|
The Schwab International Equity ETF (SCHF) is a Foreign Large Blend fund that is issued by Schwab ETFs. It currently has 26.99B total assets under management and has yielded an average annual return of 6.43% over the past 10 years. The fund has a dividend yield of 2.16% with an expense ratio of 0.06%.
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%.
SCHF’s dividend yield is 0.20% higher than that of MUB (2.16% vs. 1.96%). Also, SCHF yielded on average 2.39% more per year over the past decade (6.43% vs. 4.04%). The expense ratio of SCHF is 0.01 percentage points lower than MUB’s (0.06% vs. 0.07%).
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|Samsung Electronics Co Ltd||1.6%|
|ASML Holding NV||1.29%|
|Roche Holding AG||1.24%|
|Toyota Motor Corp||1.02%|
|LVMH Moet Hennessy Louis Vuitton SE||0.93%|
|Shopify Inc A||0.78%|
SCHF’s Top Holdings are Nestle SA, Samsung Electronics Co Ltd, ASML Holding NV, Roche Holding AG, and Toyota Motor Corp at 1.66%, 1.6%, 1.29%, 1.24%, and 1.02%.
LVMH Moet Hennessy Louis Vuitton SE (0.93%), Novartis AG (0.92%), and Shopify Inc A (0.78%) have a slightly smaller but still significant weight. AstraZeneca PLC and SAP SE are also represented in the SCHF’s holdings at 0.75% and 0.74%.
|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.
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The Schwab International Equity ETF (SCHF) has a Treynor Ratio of 5.39 with a Mean Return of 0.58 and a Standard Deviation of 15.08. Its R-squared is 98.16 while SCHF’s Sharpe Ratio is 0.42. Furthermore, the fund has a Beta of 0.99 and a Alpha of 0.53.
The iShares National Muni Bond ETF (MUB) has a R-squared of 99 with a Sharpe Ratio of 0.88 and a Standard Deviation of 3.68. Its Treynor Ratio is 3.2 while MUB’s Beta is 1.01. Furthermore, the fund has a Mean Return of 0.32 and a Alpha of -0.46.
SCHF’s Mean Return is 0.26 points higher than that of MUB and its R-squared is 0.84 points lower. With a Standard Deviation of 15.08, SCHF is slightly more volatile than MUB. The Alpha and Beta of SCHF are 0.99 points higher and 0.02 points lower than MUB’s Alpha and Beta.
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SCHF had its best year in 2017 with an annual return of 25.83%. SCHF’s worst year over the past decade yielded -14.39% and occurred in 2018. In most years the Schwab International Equity ETF provided moderate returns such as in 2016, 2010, and 2020 where annual returns amounted to 2.88%, 8.6%, and 9.86% respectively.
The year 2011 was the strongest year for MUB, returning 10.85% on an annual basis. The poorest year for MUB in the last ten years was 2013, with a yield of -3.26%. Most years the iShares National Muni Bond ETF has given investors modest returns, such as in 2015, 2017, and 2020, when gains were 2.99%, 4.61%, and 4.87% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in SCHF would have resulted in a final balance of $17,089. This is a profit of $7,089 over 10 years and amounts to a compound annual growth rate (CAGR) of 6.43%.
With a $10,000 investment in MUB, the end total would have been $15,121. This equates to a $5,121 profit over 10 years and a compound annual growth rate (CAGR) of 4.04%.
SCHF’s CAGR is 2.39 percentage points higher than that of MUB and as a result, would have yielded $1,968 more on a $10,000 investment. Thus, SCHF outperformed MUB by 2.39% annually.
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