VV vs. MUB: What’s The Difference?

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

The expense ratio of VV is 0.03 percentage points lower than MUB’s (0.04% vs. 0.07%). VV also has a high exposure to the technology sector while MUB is mostly comprised of AA bonds. Overall, VV has provided higher returns than MUB over the past 11 years.

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

Summary

VV MUB
Name Vanguard Large-Cap Index Fund ETF Shares iShares National Muni Bond ETF
Category Large Blend Muni National Interm
Issuer Vanguard iShares
AUM 37.65B 22.71B
Avg. Return 14.75% 4.04%
Div. Yield 1.26% 1.96%
Expense Ratio 0.04% 0.07%

The Vanguard Large-Cap Index Fund ETF Shares (VV) is a Large Blend fund that is issued by Vanguard. It currently has 37.65B total assets under management and has yielded an average annual return of 14.75% over the past 10 years. The fund has a dividend yield of 1.26% 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%.

VV’s dividend yield is 0.70% lower than that of MUB (1.26% vs. 1.96%). Also, VV yielded on average 10.71% more per year over the past decade (14.75% vs. 4.04%). The expense ratio of VV is 0.03 percentage points lower than MUB’s (0.04% vs. 0.07%).

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Fund Composition

Holdings

VV - Holdings

VV Holdings Weight
Apple Inc 5.7%
Microsoft Corp 5.35%
Amazon.com Inc 3.87%
Facebook Inc Class A 2.19%
Alphabet Inc Class A 1.93%
Alphabet Inc Class C 1.81%
Tesla Inc 1.37%
Berkshire Hathaway Inc Class B 1.3%
NVIDIA Corp 1.24%
JPMorgan Chase & Co 1.24%

VV’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.7%, 5.35%, 3.87%, 2.19%, and 1.93%.

Alphabet Inc Class C (1.81%), Tesla Inc (1.37%), and Berkshire Hathaway Inc Class B (1.3%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VV’s holdings at 1.24% and 1.24%.

MUB - Holdings

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.

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Risk Analysis

VV MUB
Mean Return 1.24 0.32
R-squared 99.86 99
Std. Deviation 13.75 3.68
Alpha -0.08 -0.46
Beta 1.01 1.01
Sharpe Ratio 1.04 0.88
Treynor Ratio 14.14 3.2

The Vanguard Large-Cap Index Fund ETF Shares (VV) has a Beta of 1.01 with a Alpha of -0.08 and a Treynor Ratio of 14.14. Its R-squared is 99.86 while VV’s Mean Return is 1.24. Furthermore, the fund has a Sharpe Ratio of 1.04 and a Standard Deviation of 13.75.

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

VV’s Mean Return is 0.92 points higher than that of MUB and its R-squared is 0.86 points higher. With a Standard Deviation of 13.75, VV is slightly more volatile than MUB. The Alpha and Beta of VV are 0.38 points higher and 0.00 points lower than MUB’s Alpha and Beta.

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Performance

Annual Returns

VV vs. MUB - Annual Returns

Year VV MUB
2020 20.99% 4.87%
2019 31.39% 7.28%
2018 -4.44% 0.86%
2017 22.03% 4.61%
2016 11.65% 0.06%
2015 1.07% 2.99%
2014 13.39% 8.61%
2013 32.65% -3.26%
2012 16.09% 6.14%
2011 1.58% 10.85%
2010 15.81% 1.4%

VV had its best year in 2013 with an annual return of 32.65%. VV’s worst year over the past decade yielded -4.44% and occurred in 2018. In most years the Vanguard Large-Cap Index Fund ETF Shares provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.39%, 15.81%, and 16.09% 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

VV vs. MUB - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VV $10,000 $42,970 14.75%
MUB $10,000 $15,333 4.04%

A $10,000 investment in VV would have resulted in a final balance of $42,970. This is a profit of $32,970 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.75%.

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%.

VV’s CAGR is 10.71 percentage points higher than that of MUB and as a result, would have yielded $27,637 more on a $10,000 investment. Thus, VV outperformed MUB by 10.71% annually.


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