Home MUB ETF LB Rating – What You Should Know Before Investing
LB Ratings

MUB ETF LB Rating – What You Should Know Before Investing

David Waring

Symbol: MUBMUB ETF
Category: Municipal Bond Funds
Style: Passive
LB Rating: **** 4 Stars
Last Updated: 9/12/12

Useful Links:
Using LB Ratings to choose a municipal bond fund
Municipal bond funds – Are they right for you?
Active vs. Passive bond funds
Bond ETF Fees

 

 

MUB ETF Overview

Summary: The S&P National AMT-Free Municipal Bond Fund (MUB) is a solid choice for a passively managed municipal bond fund.

Commentary: The MUB ETF is the largest municipal bond ETF and a good way to get exposure to the municipal bond market at a price which is less than almost all actively managed municipal bond funds.  The fund is currently paying out around 1.80% per year in income.  Keep in mind however that this is before taxes.  For investors in the 35% tax bracket that equates to a taxable equivalent yield 2.77%.  To see what it would be for other tax brackets use our municipal bond calculator.

If interest rates rise by 1%, the MUB ETF will tend to lose about 6% of its value.   Its duration of 6.58 is about average for intermediate term municipal bond funds.

 

The MUB ETF Rating Criteria

Fees: Good Compared to active municipal bond funds, and on absolute basis, the annual expense fee of 0.25% is tiny. For passively managed funds the MUB ETF’s expense ratio is about average.  You can learn more about bond ETF fees here.

Tracking: Excellent Over 3 and 5 year time periods,  more than 99% of the MUB ETF’s performance can be attributed to changes in the index it tracks (The Barclays Intermediate Term Municipal Bond Index).  The index it tracks does a good job tracking the US investment grade municipal bond market.

However, the index does restrict its holdings to issues which were at least $100 Million or larger at the time of original issue.  It therefore does not give exposure to smaller municipal bond issues.

Liquidity: OK  The MUB ETF is the largst bond ETF with over $3 billion dollars in assets.  The size of the fund is large enough to ensure that there is an active market for buying and selling shares.   However, just because there are lots of buyers and seller does not mean that the ETF does not sell at a premium or discount to its NAV.  As municipal bonds are hot right now, the price can be over 1% higher than its underlying NAV.  This is a problem which is native to all municipal bond etfs, and MUB does a good job of handling it.  Learn why bond ETFs sometimes do not track their NAV here.

Trusted & Regulated Stock & CFD Brokers

Rating

What we like

  • 0% Fees on Stocks
  • 5000+ Stocks, ETFs and other Markets
  • Accepts Paypal Deposits

Min Deposit

$200

Charge per Trade

Zero Commission on real stocks

Rating

64 traders signed up today

Visit Now

67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Available Assets

  • Total Number of Stocks & Shares5000+
  • US Stocks
  • German Stocks
  • UK Stocks
  • European
  • ETF Stocks
  • IPO
  • Funds
  • Bonds
  • Options
  • Futures
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 Zero Commission
  • NASDAQ Zero Commission
  • DAX Zero Commission
  • Facebook Zero Commission
  • Alphabet Zero Commission
  • Tesla Zero Commission
  • Apple Zero Commission
  • Microsoft Zero Commission

Deposit Method

  • Wire Transfer
  • Credit Cards
  • Bank Account
  • Paypall
  • Skrill
  • Neteller

Rating

What we like

  • Sign up today and get $5 free
  • Fractals Available
  • Paypal Available

Min Deposit

$0

Charge per Trade

$1 to $9 PCM

Rating

Visit Now

Investing in financial markets carries risk, you have the potential to lose your total investment.

Available Assets

  • Total Number of Shares999
  • US Stocks
  • German Stocks
  • UK Stocks
  • European Stocks
  • EFTs
  • IPOs
  • Funds
  • Bonds
  • Options
  • Futures
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 $1 - $9 per month
  • NASDAQ $1 - $9 per month
  • DAX $1 - $9 per month
  • Facebook $1 - $9 per month
  • Alphabet $1 - $9 per month
  • Telsa $1 - $9 per month
  • Apple $1 - $9 per month
  • Microsoft $1 - $9 per month

Deposit Method

  • Wire Transfer
  • Credit Cards
  • Bank Account

David Waring

David Waring

David Waring was the founder of LearnBonds.com and has been a major contributor to the extensive library of investing news and information available on the site. Until the launch of Learnbonds.com in late 2011 there was no single site on the internet catering exclusively to the individual bond investor. This was true even though more individuals own stocks than bonds. Learn Bonds was launched to fill that gap.