Skip to content

VO vs. MUB: What’s The Difference?

The Vanguard Mid-Cap Index Fund ETF Shares (VO) and the iShares National Muni Bond ETF (MUB) are both among the Top 100 ETFs. VO is a Vanguard Mid-Cap Blend fund and MUB is a iShares Muni National Interm fund. So, what’s the difference between VO and MUB? And which fund is better?

The expense ratio of VO is 0.03 percentage points lower than MUB’s (0.04% vs. 0.07%). VO also has a high exposure to the technology sector while MUB is mostly comprised of AA bonds. Overall, VO has provided higher returns than MUB over the past ten years.

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

TIP: Keep track of all your investments with Personal Capital. I use this amazing tool to aggregate all investments in one place and make sure I'm on track to financial freedom. Oh, and did I mention it's free? Try it out here (link to Personal Capital).

Summary

VOMUB
NameVanguard Mid-Cap Index Fund ETF SharesiShares National Muni Bond ETF
CategoryMid-Cap BlendMuni National Interm
IssuerVanguardiShares
AUM154.08B22.71B
Avg. Return14.34%4.04%
Div. Yield1.23%1.96%
Expense Ratio0.04%0.07%

The Vanguard Mid-Cap Index Fund ETF Shares (VO) is a Mid-Cap Blend fund that is issued by Vanguard. It currently has 154.08B total assets under management and has yielded an average annual return of 14.34% over the past 10 years. The fund has a dividend yield of 1.23% with an expense ratio of 0.04%.

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%.

VO’s dividend yield is 0.73% lower than that of MUB (1.23% vs. 1.96%). Also, VO yielded on average 10.30% more per year over the past decade (14.34% vs. 4.04%). The expense ratio of VO is 0.03 percentage points lower than MUB’s (0.04% 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

VO - Holdings

VO HoldingsWeight
IDEXX Laboratories Inc0.78%
DocuSign Inc0.75%
Marvell Technology Inc0.68%
IQVIA Holdings Inc0.68%
Chipotle Mexican Grill Inc0.63%
Veeva Systems Inc Class A0.62%
Digital Realty Trust Inc0.62%
Centene Corp0.62%
Aptiv PLC0.62%
Carrier Global Corp Ordinary Shares0.61%

VO’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Marvell Technology Inc, IQVIA Holdings Inc, and Chipotle Mexican Grill Inc at 0.78%, 0.75%, 0.68%, 0.68%, and 0.63%.

Veeva Systems Inc Class A (0.62%), Digital Realty Trust Inc (0.62%), and Centene Corp (0.62%) have a slightly smaller but still significant weight. Aptiv PLC and Carrier Global Corp Ordinary Shares are also represented in the VO’s holdings at 0.62% and 0.61%.

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.

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

VOMUB
Mean Return1.140.32
R-squared92.2299
Std. Deviation15.653.68
Alpha-2.71-0.46
Beta1.111.01
Sharpe Ratio0.830.88
Treynor Ratio11.323.2

The Vanguard Mid-Cap Index Fund ETF Shares (VO) has a Sharpe Ratio of 0.83 with a Alpha of -2.71 and a R-squared of 92.22. Its Treynor Ratio is 11.32 while VO’s Standard Deviation is 15.65. Furthermore, the fund has a Beta of 1.11 and a Mean Return of 1.14.

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

VO’s Mean Return is 0.82 points higher than that of MUB and its R-squared is 6.78 points lower. With a Standard Deviation of 15.65, VO is slightly more volatile than MUB. The Alpha and Beta of VO are 2.25 points lower and 0.10 points higher 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

VO vs. MUB - Annual Returns

YearVOMUB
202018.22%4.87%
201931.04%7.28%
2018-9.21%0.86%
201719.25%4.61%
201611.23%0.06%
2015-1.34%2.99%
201413.76%8.61%
201335.15%-3.26%
201215.98%6.14%
2011-1.96%10.85%
201025.57%1.4%

VO had its best year in 2013 with an annual return of 35.15%. VO’s worst year over the past decade yielded -9.21% and occurred in 2018. In most years the Vanguard Mid-Cap Index Fund ETF Shares provided moderate returns such as in 2014, 2012, and 2020 where annual returns amounted to 13.76%, 15.98%, and 18.22% 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

VO vs. MUB - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VO$10,000$40,40414.34%
MUB$10,000$15,3334.04%

A $10,000 investment in VO would have resulted in a final balance of $40,404. This is a profit of $30,404 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.34%.

With a $10,000 investment in MUB, the end total would have been $15,333. This equates to a $5,333 profit over 11 years and a compound annual growth rate (CAGR) of 4.04%.

VO’s CAGR is 10.30 percentage points higher than that of MUB and as a result, would have yielded $25,071 more on a $10,000 investment. Thus, VO outperformed MUB by 10.30% 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.

Leave a Reply

Your email address will not be published.