Vanguard VCIT vs iShares MUB: Which Bond ETF Should You Choose?
Corporate bonds offer higher yields and lower costs, while municipal bonds deliver tax-exempt income with significantly lower volatility.
Overview
Investors seeking tax-exempt income may prefer iShares National Muni Bond ETF (NYSEMKT:MUB), while those prioritizing higher yields and lower costs could favor Vanguard Intermediate-Term Corporate Bond ETF (NASDAQ:VCIT).
Fixed-income investors often choose between municipal and corporate debt depending on their specific tax bracket and overall risk appetite. While the iShares fund targets the tax-advantaged municipal market for those in higher brackets, the Vanguard fund provides exposure to investment-grade corporate bonds with intermediate maturities. This comparison analyzes how these two massive bond funds differ in cost, volatility, and total return.
Details
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 based on the July 1 closing price.
Source
Originally published at www.fool.com.