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.
Summary
| SCHF | MUB | |
| Name | Schwab International Equity ETF | iShares National Muni Bond ETF |
| Category | Foreign Large Blend | Muni National Interm |
| Issuer | Schwab ETFs | iShares |
| AUM | 26.99B | 22.71B |
| Avg. Return | 6.43% | 4.04% |
| Div. Yield | 2.16% | 1.96% |
| Expense Ratio | 0.06% | 0.07% |
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%).
FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).
Fund Composition
Holdings
| SCHF Holdings | Weight |
| Nestle SA | 1.66% |
| 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% |
| Novartis AG | 0.92% |
| Shopify Inc A | 0.78% |
| AstraZeneca PLC | 0.75% |
| SAP SE | 0.74% |
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 |
| 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.
NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).
Risk Analysis
| SCHF | MUB | |
| Mean Return | 0.58 | 0.32 |
| R-squared | 98.16 | 99 |
| Std. Deviation | 15.08 | 3.68 |
| Alpha | 0.53 | -0.46 |
| Beta | 0.99 | 1.01 |
| Sharpe Ratio | 0.42 | 0.88 |
| Treynor Ratio | 5.39 | 3.2 |
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.
FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!
Performance
Annual Returns
| Year | SCHF | MUB |
| 2020 | 9.86% | 4.87% |
| 2019 | 22.15% | 7.28% |
| 2018 | -14.39% | 0.86% |
| 2017 | 25.83% | 4.61% |
| 2016 | 2.88% | 0.06% |
| 2015 | -2.44% | 2.99% |
| 2014 | -4.44% | 8.61% |
| 2013 | 20.03% | -3.26% |
| 2012 | 17.12% | 6.14% |
| 2011 | -12.32% | 10.85% |
| 2010 | 8.6% | 1.4% |
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.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| SCHF | $10,000 | $17,089 | 6.43% |
| MUB | $10,000 | $15,121 | 4.04% |
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.
Current recommendations:
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.
I started this blog because I believe that money is just a means to an end: to be free to spend your time as you wish, to maximize your positive impact on the world.
To track my progress towards complete financial independence I use Personal Capital. Most of my monthly surplus I invest in Vanguard ETFs with M1 Finance. I use the dividends (plus their 'borrow' option) to invest in real estate deals with Fundrise.
Finally, I invest the real estate distributions into startups using Mainvest and high-yield real estate debt with Groundfloor.
