Rieger Report® ETF Face-off: MUB v. TAXF

ETF Face-off: MUB v. TAXF

In this face-off, I am comparing the passive “beta” municipal bond ETF, iShares (MUB) which is an investment grade ETF v. American Century Investments active municipal bond ETF (TAXF) which can allocate up to 35% in higher yielding municipal bonds.

The American Century active municipal bond ETF is a semi-transparent ETF, so some of the important data for use in a comparison like yields, duration and top holdings is not as current when compared to the highly transparent iShares MUB.

Normally, I would give the edge to the American Century ETF TAXF. The opportunistic capabilities should enable the portfolio managers to demonstrate their value proposition.  The advantage goes to MUB at this time.

  • The performance of TAXF so far in 2020, has lagged behind the simple “beta” exposure of MUB.
  • Important in this low rate environment is management fees and TAXF fees are higher v. MUB.
  • Semi-transparent ETFs, are what they say they are, less transparent than passive ETFs. In general, I prefer transparent bond ETFs so I can gauge current key data for myself.
  • The $16.9billion iShares National Municipal Bond ETF (MUB) does what it was created for: tracks the investment grade municipal bond market and provides tremendous liquidity for those that need it.

Intermediate Municipal ETFs: MUB v. TAXF


Sources: iShares.com, NYLinvestments.com and Yahoo.com. Table is provided for illustrative purposes only.  Past performance is not a guarantee of future results. Data as of 6/23/2020. unless otherwise noted. (1) Data as of 5/29/2020. (2) Data as of 5/31/2020.

Intermediate Municipal ETFs: MUB v. TAXF Face Off


Analyst Disclosures

  • At the time of this writing, JR Rieger’s fixed income related holdings include investment grade individual municipal bonds, insured municipal bonds, a municipal bond money market fund and a position in the VanEck Vectors High-Yield Municipal Index ETF (HYD).

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