MUB vs TAXF

MUBAiShares National Muni Bond ETF

TAXFAAmerican Century Diversified Municipal Bond ETF

In short

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.

TAXF Most muni ETFs just track an index of investment-grade paper. TAXF is actively run and can swing 5% to 35% of the book into high-yield and unrated munis, inside a 3 to 8 year duration band, for 0.25% a year.

Stated mandate

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.

TAXF Seeks current income exempt from federal income tax through an actively managed portfolio of municipal bonds spanning investment-grade and high-yield quality levels.

Why people hold it

• 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

• TAXF Active in a category built on index trackers: managers set the investment-grade versus high-yield mix, with 5% to 35% earmarked for below-investment-grade and unrated munis.americancentury.comamericancentury.com 2
• Guardrails travel with the flexibility: a stated 3 to 8 year duration range to temper rate swings, spread across roughly 800 bonds.americancentury.com
• Pays monthly, and the income it targets is exempt from federal income tax.
• Trading since 2018, and it sits in the upper tier of a 60-plus fund muni bond group on our review.

Worth knowing

• 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.

• TAXF At 0.25% the fee is near the category median, but the big index trackers undercut it badly: VTEB and SCMB at 0.03%, MUB at 0.05%. You are paying for the credit calls.
• The extra income comes from high-yield and unrated munis, which is also where default and liquidity risk sit. Up to 35% of the portfolio can live there.americancentury.com
• Not one of the category's giants by assets or daily volume, so spreads and order size are worth a look before you trade.

Full MUB profile⁠

Full TAXF profile⁠