---
title: "Investing in Bond ETFs? Here's How MUB and VCIT Stack Up."
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/280680610.md"
description: "The Vanguard Intermediate-Term Corporate Bond ETF (VCIT) and the iShares National Muni Bond ETF (MUB) both offer low-cost access to investment-grade bonds. VCIT provides a higher yield (4.96%) and better 1-year return (6.53%) but comes with greater interest rate sensitivity and credit risk. In contrast, MUB focuses on municipal bonds, offering broader diversification and lower historical drawdown risk, with a yield of 3.29% and a 1-year return of 4.39%. Investors should consider their goals when choosing between these ETFs, as VCIT targets higher income potential while MUB appeals to those seeking tax advantages."
datetime: "2026-03-26T19:55:17.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/280680610.md)
  - [en](https://longbridge.com/en/news/280680610.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/280680610.md)
---

# Investing in Bond ETFs? Here's How MUB and VCIT Stack Up.

## Key Points

-   VCIT and MUB both keep expenses low, but VCIT delivers a higher yield and slightly better 1-year return.
-   MUB’s municipal bonds showed a much shallower five-year drawdown than VCIT’s corporates, which signals lower historical risk.
-   MUB holds over 6,000 muni bonds for broad diversification, while VCIT focuses on investment-grade corporate bonds.
-   10 stocks we like better than iShares Trust - iShares National Muni Bond ETF ›

The **Vanguard Intermediate-Term Corporate Bond ETF** (NASDAQ:VCIT) and the **iShares National Muni Bond ETF** (NYSEMKT:MUB) both offer low-cost access to investment-grade bonds, but VCIT features a higher yield and greater interest rate sensitivity, while MUB brings broader diversification and lower historical drawdown risk.

Both VCIT and MUB target high-quality U.S. fixed income, but with different investor goals in mind: VCIT tilts toward corporate bonds for higher income potential, while MUB focuses on municipal bonds, appealing to those seeking tax advantages and diversification. This comparison highlights their structural and performance trade-offs.

## Snapshot (cost & size)

Metric

VCIT

MUB

Issuer

Vanguard

iShares

Expense ratio

0.03%

0.05%

1-yr return (as of 3/26/2026)

6.53%

4.39%

Dividend yield

4.96%

3.29%

Beta

1.06

0.9

AUM

$68.5 billion

$42.4 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 30-day SEC yield as of March 24 for VCIT and March 25 for MUB.

Both funds are low-cost, with VCIT slightly more affordable on expense ratio and offering a higher yield, which may appeal to income-focused investors willing to accept more interest rate sensitivity.

## Performance & risk comparison

Metric

VCIT

MUB

Max drawdown (5 y)

\-20.57%

\-11.89%

Growth of $1,000 over 5 years

$1,075

$1,041

## What's inside

MUB holds over 6,000 investment-grade municipal bonds, providing broad exposure across the U.S. muni market. With an 18.5-year track record, MUB is designed for investors seeking diversified, tax-aware bond income, and its holdings span a wide range of maturities and geographies.

VCIT, by contrast, invests in over 2,000 investment-grade corporate bonds, with a sector allocation entirely in cash and other fixed income instruments. VCIT’s focus on corporates means more exposure to credit risk and generally higher yields than municipal bonds.

For more guidance on ETF investing, check out the full guide at this link.

## What this means for investors

Bonds offer portfolio diversification, capital preservation, and consistent income, all of which may appeal to investors, particularly in the current uncertain market environment. Both VCIT and MUB offer exposure to investment-grade bonds and low expense ratios, meaning you’re not taking on much risk or paying high fees.

The main difference between the two ETFs is the type of bonds they hold. VCIT holds corporate bonds with a weighted average maturity of 7.4 years and tracks the **Bloomberg US 5-10 Year Corp Index**. These bonds typically come with higher yields to offset slightly elevated credit risk, which is why VCIT’s return, yield, and max drawdown are all higher than MUB’s.

MUB tracks the **ICE AMT-Free US National Municipal Index** and holds a large universe of municipal bonds with a weighted average maturity of 7.27 years. While the ETF’s one-year return and dividend yield may not be as exciting as VCIT’s, it does have something else going for it. Interest income from municipal bonds are free from federal — and often state and local — taxes, giving investors another way to preserve capital while realizing some potential upside and cashing in on regular income.

## Should you buy stock in iShares Trust - iShares National Muni Bond ETF right now?

Before you buy stock in iShares Trust - iShares National Muni Bond ETF, consider this:

The _Motley Fool Stock Advisor_ analyst team just identified what they believe are the **10 best stocks** for investors to buy now… and iShares Trust - iShares National Muni Bond ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when **Netflix** made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, **you’d have $497,659**!\* Or when **Nvidia** made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, **you’d have $1,095,404**!\*

Now, it’s worth noting _Stock Advisor’s_ total average return is 912% — a market-crushing outperformance compared to 185% for the S&P 500. **Don't miss the latest top 10 list, available with _Stock Advisor_, and join an investing community built by individual investors for individual investors.**

See the 10 stocks »

_\*Stock Advisor returns as of March 26, 2026._

_Sarah Sidlow has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy._

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

### Related Stocks

- [VCSH.US](https://longbridge.com/en/quote/VCSH.US.md)
- [IGSB.US](https://longbridge.com/en/quote/IGSB.US.md)
- [VCLT.US](https://longbridge.com/en/quote/VCLT.US.md)
- [SPIB.US](https://longbridge.com/en/quote/SPIB.US.md)
- [VCIT.US](https://longbridge.com/en/quote/VCIT.US.md)
- [SCHI.US](https://longbridge.com/en/quote/SCHI.US.md)
- [LQD.US](https://longbridge.com/en/quote/LQD.US.md)
- [MUB.US](https://longbridge.com/en/quote/MUB.US.md)

## Related News & Research

- [$1 million in municipal bonds generates $50,000 tax-free income that beats Treasury returns](https://longbridge.com/en/news/284921599.md)
- [Global bonds set for steep monthly losses as Iran war stokes stagflation fears](https://longbridge.com/en/news/280964987.md)
- [TREASURIES-US yields fall as US, Iran near deal](https://longbridge.com/en/news/287962671.md)
- [Pimco buys entire $400 million Blue Owl private credit bond deal, Bloomberg News reports](https://longbridge.com/en/news/282766615.md)
- [CANADA FX DEBT - Canadian dollar weakens, benchmark yield climbs](https://longbridge.com/en/news/280634936.md)