The Vanguard Total Bond Market ETF (BND 0.07%) offers broad, low-cost exposure to the taxable bond market, while the iShares National Muni Bond ETF (MUB 0.03%) focuses on high-quality, tax-exempt municipal securities for income-focused investors.
Investors often choose between these funds based on their tax situation and the role of fixed income in their portfolio. While BND serves as a benchmark for the entire U.S. investment-grade bond market, MUB tracks an index of municipal debt, offering potential federal tax advantages that could be attractive to those in higher tax brackets.
Snapshot (cost & size)
| Metric | MUB | BND |
|---|---|---|
| Issuer | iShares | Vanguard |
| Share price | $107.62 (as of 2026-06-30) | $73.41 (as of 2026-06-30) |
| Expense ratio | 0.05% | 0.03% |
| 1-yr return (as of 2026-06-30) | 6.30% | 4.00% |
| Dividend yield | 3.20% | 3.90% |
| Beta | 0.24 | 0.25 |
| AUM | $45.8 billion | $157.8 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12Â months. Dividend yield is the trailing-12-month distribution yield.
Cost-conscious investors may lean toward the Vanguard fund for its lower 0.03% expense ratio. While the Vanguard fund provides a higher 3.90% distribution yield, the tax-exempt status of the iShares fund income often makes its 3.20% yield competitive on a tax-equivalent basis. The 0.79 percentage point yield gap reflects the different underlying risks and tax treatments of these bond categories.
Performance & risk comparison
| Metric | MUB | BND |
|---|---|---|
| Max drawdown (5 yr) | (11.90%) | (17.90%) |
| Growth of $1,000 over 5 years (total return) | $1,048 | $1,007 |
iShares Trust – iShares National Muni Bond ETF
Today’s Change
(-0.03%) $-0.04
Current Price
$107.47
Key Data Points
Day’s Range
$107.42 – $107.53
52wk Range
$103.14 – $109.00
Volume
1M
What’s inside
The Vanguard Total Bond Market ETF (BND 0.07%) tracks a market-cap-weighted index providing extensive exposure to the U.S. taxable, investment-grade bond market. Its holdings include a broad mix of government and corporate debt, specifically excluding inflation-protected or tax-exempt securities. This fund launched in 2007. Vanguard Total Bond Market ETF has paid $2.90 per share over the trailing 12 months, which on its recent ~$73.41 share price works out to a 3.90% yield.
The iShares National Muni Bond ETF (MUB 0.03%) focuses exclusively on high-quality municipal bonds issued across the United States. This exchange-traded fund is designed to closely replicate the performance of an index that comprises tax-exempt debt, which may appeal to investors looking to maximize after-tax income. This fund launched in 2007. iShares National Muni Bond ETF has paid $3.40 per share over the trailing 12 months, which on its recent ~$107.62 share price works out to a 3.20% yield.
For more guidance on ETF investing, check out the full guide at this link.
Vanguard Total Bond Market ETF
Today’s Change
(-0.07%) $-0.06
Current Price
$73.06
Key Data Points
Day’s Range
$73.03 – $73.13
52wk Range
$72.34 – $75.23
Volume
82.2K
What this means for investors
BND’s stated yield is higher than MUB’s, and it costs slightly less. On paper, that makes BND look like the straightforward winner. But bond investing is rarely that simple, and this comparison is a good example of why.
MUB holds more than 6,300 municipal bonds whose income is generally exempt from federal taxes. For investors in higher tax brackets, that exemption changes the math entirely. MUB’s 3.4% SEC yield translates to a tax-equivalent yield of approximately 5.8% for investors in the highest federal bracket. That’s quite a bit higher than BND’s taxable income once the IRS takes its share. MUB has also proven more resilient during market stress, with a smaller maximum drawdown than BND over the past five years.
BND’s broader mix of Treasuries, corporate bonds, and mortgage-backed securities makes it the more versatile core bond holding for investors in lower tax brackets or those holding bonds inside a tax-advantaged retirement account. For taxable account investors in higher brackets, MUB’s tax advantage is the more important number in this comparison.
