⚖️ MUB vs VTEB Comparison · Free & No Signup

MUB vs VTEB: Tax-Free Municipal Bond ETFs — VTEB Is Clearly Cheaper

Name: MUB vs VTEB: expense ratio, index, holdings and returns
Creator: ETF BFF
License: https://etfbff.com/about/

MUB and VTEB both track the national investment-grade municipal bond market. VTEB charges 0.03%; MUB charges 0.07%. For buy-and-hold muni exposure, the fee difference matters.

💰 VTEB is cheaper 🔬 Compare top 10 holdings → 💡 Plain-English verdict

🤝 BFF Take

VTEB Wins on Cost — MUB Only Makes Sense for Options Liquidity

MUB (iShares National Muni Bond ETF) and VTEB (Vanguard Tax-Exempt Bond ETF) both provide exposure to the US investment-grade municipal bond market — state and local government bonds with federally tax-exempt interest. MUB tracks the ICE AMT-Free US National Municipal Index with ~3,500 bonds; VTEB tracks the Standard & Poor's National AMT-Free Municipal Bond Index with ~6,500+ bonds. VTEB charges 0.03% vs MUB's 0.07% — more than double the fee for similar exposure. MUB has larger AUM ($28B vs $12B for VTEB) and a more developed options market. For long-term tax-exempt income investors, VTEB's lower cost is the clear winner. MUB only makes sense if you need options liquidity for tactical municipal bond positioning.

📋 Quick Takeaways

🏛️Both hold investment-grade municipal bonds — federally tax-exempt interest income; nearly identical exposure

💰VTEB costs 0.03% vs MUB's 0.07% — VTEB is more than 2x cheaper for very similar muni bond exposure

📊VTEB holds 6,500+ bonds vs MUB's 3,500 — broader diversification within the muni market

📊 Data-Based Take: VTEB has the lower fee

Whether the lower-cost fund suits your situation depends on your existing holdings, account type, tax situation, and how you use each fund. This is a cost comparison, not a personalized recommendation.

Both funds trade commission-free at every major brokerage. Where to buy them →

✓ ETF BFF Editorial Team · Data as of Oct 14, 2026 · Educational only, not financial advice

MUB

iShares National Muni Bond ETF

Expense Ratio

0.07%

1-Year Return

-5.5%

AUM

$46.6B

Holdings

3,500

VTEB

Vanguard Tax-Exempt Bond Index Fund ETF Shares

Expense Ratio

0.03% ✓

1-Year Return

-5.9%

AUM

$51.7B

Holdings

6,500

📋 MUB vs VTEB: Key Facts Side by Side

Metric	MUB	VTEB
Fund Name	iShares National Muni Bond ETF	Vanguard Tax-Exempt Bond Index Fund ETF Shares
Issuer	iShares	Vanguard
Tracks Index	ICE AMT-Free US National Municipal	S&P National AMT-Free Municipal Bond
Expense Ratio	0.07%	0.03% ✓
Cost per $10K/yr	$7.00	$3.00
AUM	$46.6B	$51.7B
Holdings	3,500	6,500
Inception	2007	2015
1-Year Return	-5.55%	-5.90%
3-Year Return	+2.71%	+2.79%
5-Year Return	+0.04%	+0.00%
Dividend Yield	3.40%	3.60%
Holdings Overlap	See holdings overlap →
Avg Bid-Ask Spread	0.01%	0.01%

AUM and returns updated Oct 14, 2026 from ETF BFF database; expense ratios verified against issuer filings. Returns are annualised. Not investment advice.

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📊 MUB vs VTEB: Annualised Returns

Annualised returns (trailing, price-based). Past performance does not guarantee future results.

🎯 Which Fund Fits Which Investor?

Often fits investors who...

MUB

want income and stability with lower portfolio volatility
already use iShares and prefer staying within one fund family

Often fits investors who...

VTEB

want the lowest fees: saves ~$4/yr per $10K vs MUB
want broader diversification (6,500 holdings vs 3,500)
want income and stability with lower portfolio volatility

💰 What the Fee Difference Actually Costs

Adjust the numbers for your situation. This models each fund's expense ratio compounding against your balance over time.

Investment amount$ Years held Expected annual return%

Assumes a constant annual return reinvested, with each fund's expense ratio deducted yearly. Illustrative only; actual returns vary. Past performance does not guarantee future results.

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❓ MUB vs VTEB: Frequently Asked Questions

Who should invest in municipal bond ETFs like MUB and VTEB?

Municipal bonds are most beneficial for investors in high tax brackets (32%+) who hold bonds in taxable accounts. The tax-exempt interest from munis is worth more to someone in the 37% bracket than to someone in the 12% bracket. In tax-advantaged accounts (IRA, 401k), taxable bonds often yield more than munis on an after-tax basis — so MUB/VTEB are typically not the right choice for tax-advantaged accounts.

Are municipal bonds safe?

MUB and VTEB hold investment-grade municipal bonds — the highest quality muni bonds from creditworthy state and local governments. Default rates on investment-grade munis are extremely low historically (well below investment-grade corporate bonds). However, muni bonds are not risk-free — they carry interest rate risk (prices fall when rates rise) and credit risk from individual issuers. The 2022-2023 rate hike cycle caused meaningful price declines in muni ETFs despite their high credit quality.

What is the tax-equivalent yield of MUB and VTEB?

To compare muni yields to taxable bond yields, use the tax-equivalent yield formula: muni yield ÷ (1 - your tax rate). If MUB/VTEB yield 3.5% and you're in the 37% federal bracket, the tax-equivalent yield is 3.5% ÷ 0.63 = 5.56%. Compare that to taxable bond yields at similar duration and credit quality. If taxable bonds yield less than 5.56%, munis offer better after-tax income for a 37% bracket investor.

Are there state-specific muni ETFs?

Yes — iShares offers state-specific muni ETFs for California (CMF), New York (NYF), and other high-tax states. These provide bonds exempt from both federal AND state taxes for residents of those states, increasing the tax benefit. However, they are less diversified (single-state credit concentration) and less liquid than national muni ETFs like MUB and VTEB. For residents of high-tax states, state-specific munis can be worth the concentration risk.

How does duration affect MUB and VTEB?

Both MUB and VTEB have intermediate duration — roughly 6-7 years. This means for every 1% rise in interest rates, NAV falls approximately 6-7%. During the 2022 rate hike cycle (rates rose ~4%), both ETFs fell roughly 15-20% in NAV. Duration risk is the primary risk for muni bond investors, not credit risk. Investors who need stability should look at short-duration alternatives like VTES (Vanguard Short-Term Tax-Exempt Bond, 0.07%).

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📄 MUB & VTEB Fact Sheets

MUB Fact Sheet→ VTEB Fact Sheet→

ℹ️ Data shown is for educational purposes and may not reflect the most current figures. Returns are trailing price-based and exclude dividend reinvestment. Past performance does not guarantee future results. ETF BFF is not a licensed financial advisor. This is not personalized financial advice.