iShares National Muni Bond ETF (MUB +0.07%) focuses on high-quality municipal debt with federal tax advantages, while Vanguard Intermediate-Term Treasury ETF (VGIT 0.09%) offers lower costs and direct exposure to U.S. Treasuries.
Both funds serve as core fixed-income holdings for investors seeking stability and income. The iShares fund provides broad exposure to the municipal bond market, which is often favored by high-net-worth individuals for its tax benefits. Conversely, the Vanguard fund tracks intermediate-term Treasury notes, offering government backing and high liquidity. These funds both offer high credit quality but cater to different tax situations and risk tolerances.
Snapshot (cost & size)
| Metric | MUB | VGIT |
|---|---|---|
| Issuer | iShares | Vanguard |
| Expense ratio | 0.05% | 0.03% |
| 1-yr return (as of June 8, 2026) | 7.00% | 3.60% |
| Dividend yield | 3.20% | 3.90% |
| Beta | 0.24 | 0.17 |
| AUM | $45.2 billion | $40.9 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 12 months. Dividend yield is the trailing-12-month distribution yield.
Vanguard Intermediate-Term Treasury ETF is the more affordable option with a 0.03% expense ratio. While its 3.90% yield is higher than the 3.20% offered by iShares National Muni Bond ETF, investors should consider the tax-exempt status of municipal bonds.
Performance & risk comparison
| Metric | MUB | VGIT |
|---|---|---|
| Max drawdown (5 yr) | (11.90%) | (15.00%) |
| Growth of $1,000 over 5 years (total return) | $1,039 | $997 |
NYSEMKT: MUB
Key Data Points
What's inside
Vanguard Intermediate-Term Treasury ETF is a fixed-income fund that primarily holds U.S. Treasury bonds. Launched in 2009, the fund has a trailing-12-month dividend of $2.27 per share. It focuses on debt with maturities between three and 10 years, making it moderately sensitive to shifts in the interest rate environment.
The iShares National Muni Bond ETF tracks an index of investment-grade municipal bonds and was launched in 2007. The fund has paid $3.40 per share over the trailing 12 months. Because it targets municipal debt, its yield is often exempt from federal income taxes, which contrasts with the fully taxable income provided by the Treasury holdings in the Vanguard fund.
For more guidance on ETF investing, check out the full guide at this link.
NASDAQ: VGIT
Key Data Points
What this means for investors
The most important factor for you to consider here is not the yield, but your tax bracket. MUB holds thousands of municipal bonds whose income is generally exempt from federal taxes, which means higher-bracket investors keep more of every dollar the fund distributes. VGIT yields slightly more on paper, but for investors paying 32% or 37% in federal taxes, that advantage largely disappears once the tax bill arrives.
That tax distinction also shapes how these funds behave differently in a portfolio. VGIT holds only U.S. Treasury bonds, which are simple, liquid, and sensitive to interest rate moves. MUB's broader focus on municipal bonds has historically cushioned rate-driven drawdowns more effectively, as last year's returns illustrated: MUB returned roughly 7% while VGIT managed 3.6%.
For investors in lower tax brackets or holding bonds inside a tax-advantaged retirement account, VGIT's slightly lower cost and Treasury-only simplicity make it the more straightforward choice. For those in higher brackets holding bonds in a taxable account, MUB's tax exemption is worth understanding carefully before defaulting to the cheaper alternative.
