MUB vs SPY
iShares National Muni Bond ETF vs State Street SPDR S&P 500 ETF Trust
Quick Verdict
MUB has a lower expense ratio. SPY delivered stronger 1-year returns. MUB offers more diversification with 874 holdings.
Side-by-Side Comparison
| Metric | MUB | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.05% | 0.09% | |
| AUM | $45.2B | $789.1B | |
| Dividend Yield | 3.16% | 1.01% | |
| Holdings | 6,825 | 505 | |
| YTD Return | +0.41% | +13.68% | |
| 1Y Return | +4.78% | +21.53% | |
| 3Y Return (annualized) | +3.13% | +21.44% | |
| 5Y Return (annualized) | +0.65% | +13.18% | |
| Volatility (annualized) | 5.4% | 15.3% | |
| Max Drawdown | -14.1% | -56.5% | |
| Fund Family | iShares by BlackRock (US) | State Street Investment Management | |
| Category | Tax Preferred | Equity | |
| Inception | Sep 7, 2007 | Jan 22, 1993 |
MUB vs SPY Performance
iShares National Muni Bond ETF (MUB) is a ETF from iShares by BlackRock (US) and State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management. Over the past year MUB returned +4.78% while SPY returned +21.53%. Year to date, MUB is up 0.41% versus a gain of 13.68% for SPY.
Over three years, MUB compounded at +3.13% per year against +21.44% for SPY; over five years the annualized figures are +0.65% and +13.18% respectively. Across the full 19-year window we track, SPY has the edge at +8.85% annualized vs +0.99%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
SPY has been the more volatile fund, with annualized monthly volatility of 15.3% compared with 5.4% for MUB. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -14.1% for MUB and -56.5% for SPY. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.28. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
MUB charges 0.05% per year while SPY charges 0.09%. On a $10,000 position that is $5 vs $9 annually, a gap of $4 per year that compounds over a long holding period. On income, MUB currently yields 3.16% against 1.01% for SPY.
Holdings Overlap
MUB and SPY share 0 holdings out of 1377 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, MUB or SPY?
MUB has an expense ratio of 0.05% while SPY charges 0.09%. MUB is the cheaper option. On a $10,000 investment, that is $4 per year of difference.
Which performed better, MUB or SPY?
Over the past year MUB returned +4.78% vs +21.53% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (19 years), MUB annualized +0.99% vs +8.85% for SPY. Past performance does not guarantee future results.
Which is riskier, MUB or SPY?
SPY has been the more volatile fund at 15.3% annualized versus 5.4% for MUB. Worst drawdown: MUB -14.1% vs SPY -56.5%.
Should I hold both MUB and SPY?
MUB and SPY have a monthly-return correlation of 0.28, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between MUB and SPY?
MUB and SPY share 0 common holdings with a 0.0% weight overlap. Combined, they hold 1377 unique securities.
Which pays a higher dividend, MUB or SPY?
MUB yields 3.16% while SPY yields 1.01%, so MUB currently pays the higher dividend yield.
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