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VXUS vs. MUB: What’s The Difference?

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

The expense ratio of VXUS is 0.01 percentage points higher than MUB’s (0.08% vs. 0.07%). VXUS also has a high exposure to the financial services sector while MUB is mostly comprised of AA bonds. Overall, VXUS has provided higher returns than MUB over the past ten years.

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

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Summary

VXUSMUB
NameVanguard Total International Stock Index Fund ETF SharesiShares National Muni Bond ETF
CategoryForeign Large BlendMuni National Interm
IssuerVanguardiShares
AUM404.73B22.71B
Avg. Return8.41%4.04%
Div. Yield2.44%1.96%
Expense Ratio0.08%0.07%

The Vanguard Total International Stock Index Fund ETF Shares (VXUS) is a Foreign Large Blend fund that is issued by Vanguard. It currently has 404.73B total assets under management and has yielded an average annual return of 8.41% over the past 10 years. The fund has a dividend yield of 2.44% with an expense ratio of 0.08%.

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%.

VXUS’s dividend yield is 0.48% higher than that of MUB (2.44% vs. 1.96%). Also, VXUS yielded on average 4.37% more per year over the past decade (8.41% vs. 4.04%). The expense ratio of VXUS is 0.01 percentage points higher than MUB’s (0.08% vs. 0.07%).

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Fund Composition

Holdings

VXUS - Holdings

VXUS HoldingsWeight
Taiwan Semiconductor Manufacturing Co Ltd1.62%
Tencent Holdings Ltd1.41%
Alibaba Group Holding Ltd Ordinary Shares1.26%
Nestle SA1.1%
Samsung Electronics Co Ltd1.05%
ASML Holding NV0.86%
Roche Holding AG0.81%
Toyota Motor Corp0.67%
LVMH Moet Hennessy Louis Vuitton SE0.61%
Novartis AG0.6%

VXUS’s Top Holdings are Taiwan Semiconductor Manufacturing Co Ltd, Tencent Holdings Ltd, Alibaba Group Holding Ltd Ordinary Shares, Nestle SA, and Samsung Electronics Co Ltd at 1.62%, 1.41%, 1.26%, 1.1%, and 1.05%.

ASML Holding NV (0.86%), Roche Holding AG (0.81%), and Toyota Motor Corp (0.67%) have a slightly smaller but still significant weight. LVMH Moet Hennessy Louis Vuitton SE and Novartis AG are also represented in the VXUS’s holdings at 0.61% and 0.6%.

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.

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Risk Analysis

VXUSMUB
Mean Return0.560.32
R-squared98.3999
Std. Deviation15.123.68
Alpha0.31-0.46
Beta0.991.01
Sharpe Ratio0.40.88
Treynor Ratio5.143.2

The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Beta of 0.99 with a Treynor Ratio of 5.14 and a Alpha of 0.31. Its Mean Return is 0.56 while VXUS’s Standard Deviation is 15.12. Furthermore, the fund has a Sharpe Ratio of 0.4 and a R-squared of 98.39.

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

VXUS’s Mean Return is 0.24 points higher than that of MUB and its R-squared is 0.61 points lower. With a Standard Deviation of 15.12, VXUS is slightly more volatile than MUB. The Alpha and Beta of VXUS are 0.77 points higher and 0.02 points lower than MUB’s Alpha and Beta.

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Performance

Annual Returns

VXUS vs. MUB - Annual Returns

YearVXUSMUB
202011.32%4.87%
201921.58%7.28%
2018-14.42%0.86%
201727.52%4.61%
20164.72%0.06%
2015-4.28%2.99%
2014-4.17%8.61%
201315.16%-3.26%
201218.22%6.14%
20110.0%10.85%
20100.0%1.4%

VXUS had its best year in 2017 with an annual return of 27.52%. VXUS’s worst year over the past decade yielded -14.42% and occurred in 2018. In most years the Vanguard Total International Stock Index Fund ETF Shares provided moderate returns such as in 2010, 2016, and 2020 where annual returns amounted to 0.0%, 4.72%, and 11.32% 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

VXUS vs. MUB - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VXUS$10,000$19,3158.41%
MUB$10,000$13,6414.04%

A $10,000 investment in VXUS would have resulted in a final balance of $19,315. This is a profit of $9,315 over 9 years and amounts to a compound annual growth rate (CAGR) of 8.41%.

With a $10,000 investment in MUB, the end total would have been $13,641. This equates to a $3,641 profit over 9 years and a compound annual growth rate (CAGR) of 4.04%.

VXUS’s CAGR is 4.37 percentage points higher than that of MUB and as a result, would have yielded $5,674 more on a $10,000 investment. Thus, VXUS outperformed MUB by 4.37% annually.


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