The iShares National Muni Bond ETF (MUB) Offers a Broader Bond Mix Than the Vanguard Intermediate-Term Treasury Index ETF (VGIT)

Core Viewpoint - The Vanguard Intermediate-Term Treasury ETF (VGIT) and the iShares National Muni Bond ETF (MUB) cater to investors seeking moderate income and lower volatility, but they differ significantly in bond exposure and tax implications [1][2]. Cost and Size Comparison - VGIT has a lower expense ratio of 0.03% compared to MUB's 0.05% and offers a higher dividend yield of 3.8% versus MUB's 3.2% [3][4]. - As of March 24, 2026, VGIT has an AUM of $48.8 billion while MUB has $42.3 billion [3]. Performance and Risk Comparison - Over the past five years, VGIT experienced a maximum drawdown of -15.01%, while MUB had a lower drawdown of -11.89% [5]. - The growth of $1,000 over five years was $876 for VGIT and $911 for MUB, indicating MUB's diversified portfolio helped preserve more capital [5]. Portfolio Composition - MUB holds over 6,300 investment-grade municipal bonds, providing broad diversification across U.S. states and agencies [6]. - VGIT focuses on U.S. Treasury notes and bonds, with its largest holdings being specific Treasury securities, offering pure government exposure [7]. Implications for Investors - MUB has a tax advantage in states with no income tax, as its interest payments are generally free from federal taxes, unlike VGIT [9]. - For investors prioritizing stability over overall returns, VGIT may be more appealing due to the U.S. government's ability to manage tax revenue shortfalls [9].