Does MUB's Tax Exemptions Give It the Edge Over IEI?

Core Insights - The iShares National Muni Bond ETF (MUB) and iShares 3-7 Year Treasury Bond ETF (IEI) provide exposure to the fixed-income market, with a focus on government bonds, highlighting differences in cost, yield, performance, and risk [1] Cost & Size Comparison - MUB has an expense ratio of 0.05% and AUM of $42.61 billion, while IEI has a higher expense ratio of 0.15% and AUM of $17.89 billion [2] - The one-year return for MUB is 0.59% compared to IEI's 2.61%, and MUB has a dividend yield of 3.13% versus IEI's 3.51% [2][3] Performance & Risk Comparison - Over five years, MUB has a max drawdown of -11.88% while IEI has a max drawdown of -13.89% [4] - The growth of $1,000 over five years is $916 for MUB and $898 for IEI, indicating MUB's slightly better performance [4] Fund Composition - IEI consists of 87 positions focused on U.S. Treasury bonds maturing in three to seven years, providing minimal credit risk with AA-rated bonds [5] - MUB holds over 6,000 investment-grade municipal bonds, primarily from state and local governments, and offers tax exemptions on interest earned [6] Implications for Investors - IEI has shown better price performance and lower risk over the last 12 months, with all holdings being federally-backed bonds [7] - MUB's tax exemptions on interest may appeal to investors, despite its higher volatility and lower credit ratings compared to IEI [8][9]