Got story updates? Submit your updates here. ›
A close examination of the physical bonds that underpin the fixed income market reveals the tangible mechanics driving investment strategies.NYC TodayThe iShares National Muni Bond ETF (MUB) and iShares 3-7 Year Treasury Bond ETF (IEI) are both high-quality fixed income ETFs from iShares, but they differ in their cost, yield, performance, and bond exposure. MUB focuses on municipal bonds while IEI tracks intermediate-term U.S. Treasuries, each offering distinct risk-return profiles for investors.
Why it matters
The choice between MUB and IEI depends on an investor’s financial goals and priorities. MUB provides tax-exempt income that can be attractive for high-income individuals, while IEI offers greater safety and stability at a higher cost. Understanding the nuances between these two bond ETFs can help investors determine which one better fits their fixed income strategy.
The details
MUB has a lower expense ratio of 0.05% compared to IEI’s 0.15%, making it the more affordable option. However, IEI offers a slightly higher dividend yield of 3.6% versus MUB’s 3.2%. In terms of performance, MUB had a 1-year return of 6.9% as of April 9, 2026, while IEI returned 4.3% over the same period. MUB also has a higher beta of 0.9 compared to IEI’s 0.7, indicating it is more volatile. In terms of portfolio composition, MUB provides exposure to a broad mix of investment-grade municipal bonds, while IEI tracks U.S. Treasury bonds with maturities between 3-7 years.
- The data in this comparison is current as of April 9, 2026.
The takeaway
Investors must weigh the trade-offs between MUB and IEI based on their specific financial goals and priorities. MUB’s tax-exempt income may be more appealing for high-income individuals, while IEI’s greater safety and stability could be preferable for those seeking a lower-risk fixed income allocation. Understanding the nuances of these two bond ETFs can help investors make an informed decision about which one best fits their portfolio needs.