FMB vs MUB

FMBBFirst Trust Managed Municipal ETF

MUBAiShares National Muni Bond ETF

In short

FMB Most muni ETFs hand you an index and call it a day. FMB is the hands-on one: First Trust's managers pick the bonds, spread across roughly 1,300 issues, and pay out federally tax-exempt income monthly. Running since 2014.

MUB Municipal bonds, indexed and cheap. Since 2007, MUB has packaged investment-grade national munis into tax-exempt monthly income for five basis points a year, and it sits among the deepest pools in the muni-ETF aisle.

Stated mandate

FMB The fund normally invests at least 80% of its assets in federally tax-exempt municipal securities, including general-obligation, revenue, project, pre-refunded, and related municipal money-market or synthetic securities.

MUB The fund seeks to track an index of investment-grade U.S. municipal bonds, providing diversified exposure to the national municipal-bond market and tax-exempt income.

Why people hold it

• FMB Active by design. A manager chooses the bonds rather than copying a benchmark, chasing federally tax-exempt income first and long-term appreciation second.sec.gov
• Roughly 1,300 municipal issues in the portfolio, so no single school district, hospital or toll road steers the whole fund.
• Income arrives monthly, and a multi-billion-dollar asset base plus a 2014 launch make it one of the more seasoned active muni ETFs on the board.
• The portfolio has stayed tight to the tax-exempt muni mandate it advertises, which puts it in the upper half of a very crowded muni field.

• MUB 0.05% a year against a muni-ETF median near 0.30%. In a category built on modest, tax-exempt yields, that fee gap is real money left in the fund.
• The benchmark is AMT-free: the ICE AMT-Free US National Municipal Index screens out munis whose interest can be pulled into the alternative minimum tax.ishares.com
• Tracks its index closely, one of the tighter jobs in its peer group, and distributes monthly. A multi-billion-dollar fund that trades actively.
• Broad investment-grade exposure across the national muni market, spread over thousands of issuers rather than one state's budget.ishares.com

Worth knowing

• FMB Active costs money: 0.39% a year against index heavyweights like VTEB and SCMB at 0.03%. That fee gap is the hurdle the stock picking works against.
• The exemption is from regular federal income tax. State and local taxes, and gains on the shares themselves, are a separate conversation with your accountant.sec.gov
• Moderately traded rather than a volume monster, and municipal bonds themselves trade thinly, which can widen the spread you pay on the way in or out.

• MUB Two rivals undercut it: VTEB and SCMB both run 0.03%. A two-basis-point gap is small, but it is a gap.
• A bond fund with no maturity date to hold to. Share prices move with interest rates and muni credit conditions, both directions.
• National by design, so no single-state tilt and no in-state tax angle. iShares runs state-specific muni funds such as NYF for that job.

Full FMB profile⁠

Full MUB profile⁠