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.
|Name||Vanguard Mid-Cap Index Fund ETF Shares||iShares National Muni Bond ETF|
|Category||Mid-Cap Blend||Muni National Interm|
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%).
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|IDEXX Laboratories Inc||0.78%|
|Marvell Technology Inc||0.68%|
|IQVIA Holdings Inc||0.68%|
|Chipotle Mexican Grill Inc||0.63%|
|Veeva Systems Inc Class A||0.62%|
|Digital Realty Trust Inc||0.62%|
|Carrier Global Corp Ordinary Shares||0.61%|
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 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 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.
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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.
|Fund||Initial Balance||Final Balance||CAGR|
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.
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