MUB vs VTEB ETF Comparison: AI Score, Valuation, Performance and Upside
MUB and VTEB are the two premier national municipal bond ETFs — both holding investment-grade, federally tax-exempt bonds with minimal practical differences. VTEB is slightly cheaper (0.05% vs 0.07%); MUB is more liquid ($35B+ vs $30B+ AUM). For high-income investors in taxable accounts (32%+ federal bracket), either ETF is an excellent tool for generating tax-advantaged income. The choice between them is genuinely minor.
MUB vs VTEB — both are national muni bond ETFs for high-income taxpayers seeking federal-tax-exempt interest income — the primary differentiators are expense ratio (VTEB 0.05% vs MUB 0.07%) and liquidity (MUB larger AUM for institutional trading) rather than meaningful investment thesis differences.
VTEB holds the edge across 3 of 5 key metrics in this comparison. MUB has delivered stronger 1-year price return (-1.19% vs -1.45% for VTEB).
- execute large muni bond allocations at institutional scale where MUB's superior liquidity and tighter bid-ask spreads reduce trading friction for rebalancing and tax-loss harvesting
- prefer iShares/BlackRock platform integration for portfolio construction tools that use MUB as the muni bond benchmark
- want the most widely recognized and largest muni bond ETF for performance comparison against peer municipal bond funds
- make large muni bond trades where MUB's $200M+ daily volume is materially better than VTEB's lower volume for institutional position management
- prefer Vanguard's cost leadership — VTEB's 0.05% expense ratio vs MUB's 0.07% saves $20/year per $100,000 invested, compounding over multi-decade muni bond holdings in taxable accounts
- are high-income individual investors with no need for institutional trading liquidity where VTEB's slightly lower volume is irrelevant for typical portfolio sizes
- hold accounts at Vanguard where VTEB is naturally integrated with Vanguard's portfolio tools and has no transaction costs
- value Vanguard's broader 8,000+ bond count providing marginally greater individual muni issuer diversification vs MUB's universe
| Metric | MUB | VTEB |
|---|---|---|
| ETF scorei | 24.3 | 24.3 |
| Latest closei | $102.48 | $47.96 |
| 1M returni | -0.10% | -0.25% |
| 3M returni | -3.09% | -3.55% |
| 6M returni | -2.64% | -2.99% |
| 1Y returni | -1.19% | -1.45% |
The ETF score weights long-term returns and risk-adjusted performance most heavily, but still rewards low expense ratios, larger fund size, and broader diversification — so it can favor low-cost, broad, mega-cap funds over smaller thematic or actively-managed funds even when the latter have delivered stronger returns.
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | MUB | VTEB |
|---|---|---|
| 1Y ago | $10.21K (+2.1%) started 2025-10-15 | $10.2K (+2.0%) started 2025-10-15 |
| 5Y ago | $11.77K (+17.7%) started 2021-10-15 | $11.81K (+18.1%) started 2021-10-15 |
| 10Y ago | $15.69K (+56.9%) started 2016-10-17 | $15.61K (+56.1%) started 2016-10-17 |
Hypothetical — past performance does not guarantee future results.
| Metric | MUB | VTEB |
|---|---|---|
| Expense ratioi | 0.05% | 0.03% |
| Total assets (AUM)i | $46.62B | $51.71B |
| Dividend yieldi | 3.40% | 3.60% |
| Trailing P/Ei | N/A | N/A |
| Betai | 0.26 | 0.27 |
| 52-week change | -1.19% | -1.45% |
| Metric | MUB | VTEB |
|---|---|---|
| 1Y returni | -1.19% | -1.45% |
| 6M returni | -2.64% | -2.99% |
| 3M returni | -3.09% | -3.55% |
| 1M returni | -0.10% | -0.25% |
| 1Y Sharpe ratio | -1.57 | -1.70 |
| Betai | 0.26 | 0.27 |
| Dividend yieldi | 3.40% | 3.60% |
| 5Y CAGR | +0.30% | +0.26% |
Over the past year, MUB and VTEB have moved strongly in the same direction (correlation of 0.97), based on daily returns.
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | MUB | VTEB |
|---|---|---|---|
| 1Y | Growthi | -1.19% | -1.45% |
| CAGRi | -1.19% | -1.45% | |
| Volatilityi | 3.60% | 3.48% | |
| Sharpe ratioi | -1.57 | -1.70 | |
| Sortino ratioi | -1.98 | -2.11 | |
| Max drawdowni | 6.27% | 6.59% | |
| Current drawdowni | 3.94% | 4.28% | |
| Avg drawdowni | 1.21% | 1.19% | |
| Ulcer Indexi | 1.87% | 1.90% | |
| Max daily dropi | 0.88% | 0.86% | |
| Max wkly dropi | 2.40% | 2.61% | |
| 5Y | Growthi | +1.52% | +1.29% |
| CAGRi | +0.30% | +0.26% | |
| Volatilityi | 4.22% | 4.07% | |
| Sharpe ratioi | -0.97 | -1.02 | |
| Sortino ratioi | -1.29 | -1.35 | |
| Max drawdowni | 11.56% | 12.35% | |
| Current drawdowni | 3.94% | 4.28% | |
| Avg drawdowni | 3.53% | 3.73% | |
| Ulcer Indexi | 4.60% | 4.87% | |
| Max daily dropi | 1.82% | 2.01% | |
| Max wkly dropi | 3.24% | 3.45% | |
| 10Y | Growthi | +18.10% | +18.37% |
| CAGRi | +1.68% | +1.70% | |
| Volatilityi | 4.96% | 5.30% | |
| Sharpe ratioi | -0.55 | -0.50 | |
| Sortino ratioi | -0.71 | -0.66 | |
| Max drawdowni | 13.68% | 17.00% | |
| Current drawdowni | 3.94% | 4.28% | |
| Avg drawdowni | 2.37% | 2.44% | |
| Ulcer Indexi | 3.59% | 3.76% | |
| Max daily dropi | 6.15% | 5.85% | |
| Max wkly dropi | 9.33% | 10.60% |
| Category | MUB | VTEB |
|---|---|---|
| Fund name | iShares National Muni Bond ETF | Vanguard Tax-Exempt Bond Index Fund ETF Shares |
| Type | ETF | ETF |
| Expense ratioi | 0.05% | 0.03% |
| Total assets (AUM)i | $46.62B | $51.71B |
| Dividend yieldi | 3.40% | 3.60% |
- Federal tax-exempt income: MUB's interest is exempt from federal income taxes — for high-income investors in 37% brackets, a 3% muni yield equals a 4.8% taxable equivalent yield
- Highest muni ETF liquidity: $35B+ AUM and $200M+ daily trading volume make MUB the most liquid muni bond ETF — institutional depth for large tax-loss harvesting and rebalancing trades
- High credit quality: MUB's municipal bonds are predominantly investment-grade (A/AA) — municipal default rates are historically very low vs corporate bonds at equivalent ratings
- 0.05% expense ratio vs MUB's 0.07%: Vanguard's characteristic cost leadership — 0.02% lower expense on a large muni bond allocation compounds meaningfully over time
- 8,000+ bond diversification: VTEB's broader bond count vs MUB provides greater individual municipal issuer diversification — reducing single-issuer concentration risk
- S&P muni index methodology: VTEB's index may include bonds excluded from MUB's ICE index — slight universe difference creating portfolio diversification vs MUB
- 0.07% expense ratio vs VTEB's 0.05%: small but meaningful cost difference on a bond fund where yield matters more than in equity ETFs
- AMT exposure exclusion: 'AMT-free' in the index name means MUB excludes bonds subject to the Alternative Minimum Tax — limiting its universe slightly
- Interest rate duration risk: MUB's 5-7 year effective duration creates mark-to-market losses when interest rates rise — not capital-preservation in rising rate environments
- Lower AUM and trading volume than MUB: VTEB has smaller AUM than MUB — slightly wider bid-ask spreads for institutional-scale muni bond trading
- Near-identical to MUB for most purposes: the 0.02% expense difference and index methodology differences create minimal practical performance divergence — the choice is negligible for most investors
- Same duration and credit risk as MUB: VTEB's interest rate and credit risk profile is essentially identical to MUB — lower cost is the only meaningful differentiation
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