The Schwab U.S. Large-Cap ETF (SCHX) and the iShares National Muni Bond ETF (MUB) are both among the Top 100 ETFs. SCHX is a Schwab ETFs Large Blend fund and MUB is a iShares Muni National Interm fund. So, what’s the difference between SCHX and MUB? And which fund is better?
The expense ratio of SCHX is 0.04 percentage points lower than MUB’s (0.03% vs. 0.07%). SCHX also has a high exposure to the technology sector while MUB is mostly comprised of AA bonds. Overall, SCHX has provided higher returns than MUB over the past ten years.
In this article, we’ll compare SCHX vs. MUB. We’ll look at holdings and portfolio growth, as well as at their risk metrics and performance. Moreover, I’ll also discuss SCHX’s and MUB’s industry exposure, annual returns, and fund composition and examine how these affect their overall returns.
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|Name||Schwab U.S. Large-Cap ETF||iShares National Muni Bond ETF|
|Category||Large Blend||Muni National Interm|
The Schwab U.S. Large-Cap ETF (SCHX) is a Large Blend fund that is issued by Schwab ETFs. It currently has 30.89B total assets under management and has yielded an average annual return of 14.60% over the past 10 years. The fund has a dividend yield of 1.41% with an expense ratio of 0.03%.
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%.
SCHX’s dividend yield is 0.55% lower than that of MUB (1.41% vs. 1.96%). Also, SCHX yielded on average 10.57% more per year over the past decade (14.60% vs. 4.04%). The expense ratio of SCHX is 0.04 percentage points lower than MUB’s (0.03% vs. 0.07%).
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|Facebook Inc A||2.08%|
|Alphabet Inc A||1.84%|
|Alphabet Inc Class C||1.78%|
|Berkshire Hathaway Inc Class B||1.32%|
|JPMorgan Chase & Co||1.18%|
SCHX’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 5.37%, 5.1%, 3.69%, 2.08%, and 1.84%.
Alphabet Inc Class C (1.78%), Berkshire Hathaway Inc Class B (1.32%), and Tesla Inc (1.31%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the SCHX’s holdings at 1.25% and 1.18%.
|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.
The Schwab U.S. Large-Cap ETF (SCHX) has a Treynor Ratio of 14.06 with a Sharpe Ratio of 1.03 and a Beta of 1.02. Its Mean Return is 1.24 while SCHX’s R-squared is 99.83. Furthermore, the fund has a Alpha of -0.14 and a Standard Deviation of 13.8.
The iShares National Muni Bond ETF (MUB) has a Beta of 1.01 with a Treynor Ratio of 3.2 and a Standard Deviation of 3.68. Its Mean Return is 0.32 while MUB’s R-squared is 99. Furthermore, the fund has a Sharpe Ratio of 0.88 and a Alpha of -0.46.
SCHX’s Mean Return is 0.92 points higher than that of MUB and its R-squared is 0.83 points higher. With a Standard Deviation of 13.8, SCHX is slightly more volatile than MUB. The Alpha and Beta of SCHX are 0.32 points higher and 0.01 points higher than MUB’s Alpha and Beta.
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SCHX had its best year in 2013 with an annual return of 32.54%. SCHX’s worst year over the past decade yielded -4.52% and occurred in 2018. In most years the Schwab U.S. Large-Cap ETF provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.33%, 15.88%, and 16.06% 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 SCHX would have resulted in a final balance of $36,987. This is a profit of $26,987 over 10 years and amounts to a compound annual growth rate (CAGR) of 14.60%.
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%.
SCHX’s CAGR is 10.57 percentage points higher than that of MUB and as a result, would have yielded $21,866 more on a $10,000 investment. Thus, SCHX outperformed MUB by 10.57% annually.
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