The Vanguard Total Stock Market Index Fund ETF Shares (VTI) and the iShares National Muni Bond ETF (MUB) are both among the Top 100 ETFs. VTI is a Vanguard Large Blend fund and MUB is a iShares Muni National Interm fund. So, what’s the difference between VTI and MUB? And which fund is better?
The expense ratio of VTI is 0.04 percentage points lower than MUB’s (0.03% vs. 0.07%). VTI also has a high exposure to the technology sector while MUB is mostly comprised of AA bonds. Overall, VTI has provided higher returns than MUB over the past ten years.
In this article, we’ll compare VTI vs. MUB. We’ll look at risk metrics and performance, as well as at their holdings and fund composition. Moreover, I’ll also discuss VTI’s and MUB’s industry exposure, portfolio growth, and annual returns and examine how these affect their overall returns.
|Name||Vanguard Total Stock Market Index Fund ETF Shares||iShares National Muni Bond ETF|
|Category||Large Blend||Muni National Interm|
The Vanguard Total Stock Market Index Fund ETF Shares (VTI) is a Large Blend fund that is issued by Vanguard. It currently has 1.26T total assets under management and has yielded an average annual return of 14.70% over the past 10 years. The fund has a dividend yield of 1.26% 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%.
VTI’s dividend yield is 0.70% lower than that of MUB (1.26% vs. 1.96%). Also, VTI yielded on average 10.66% more per year over the past decade (14.70% vs. 4.04%). The expense ratio of VTI is 0.04 percentage points lower than MUB’s (0.03% vs. 0.07%).
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|Facebook Inc Class A||1.88%|
|Alphabet Inc Class A||1.66%|
|Alphabet Inc Class C||1.56%|
|Berkshire Hathaway Inc Class B||1.09%|
|JPMorgan Chase & Co||1.06%|
VTI’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 4.9%, 4.6%, 3.33%, 1.88%, and 1.66%.
Alphabet Inc Class C (1.56%), Tesla Inc (1.18%), and Berkshire Hathaway Inc Class B (1.09%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VTI’s holdings at 1.07% and 1.06%.
|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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VTI had its best year in 2013 with an annual return of 33.51%. VTI’s worst year over the past decade yielded -5.13% and occurred in 2018. In most years the Vanguard Total Stock Market Index Fund ETF Shares provided moderate returns such as in 2016, 2012, and 2010 where annual returns amounted to 12.68%, 16.41%, and 17.26% 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 VTI would have resulted in a final balance of $42,648. This is a profit of $32,648 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.70%.
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%.
VTI’s CAGR is 10.66 percentage points higher than that of MUB and as a result, would have yielded $27,315 more on a $10,000 investment. Thus, VTI outperformed MUB by 10.66% annually.
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