MUB ETF Hits 3.4% SEC Yield, Offers Tax-Exempt Income
The iShares National Muni Bond ETF (NYSEARCA: MUB), managed by BlackRock, has seen its 30-day SEC yield reach approximately 3.4% as of September 2025, translating to a tax-equivalent yield of up to 5.7% for investors in the highest federal tax bracket. This fund, with around $39 billion in assets, is the second largest in its category.
MUB offers broad exposure to the U.S. municipal bond market, with nearly 100% of its portfolio consisting of investment-grade bonds. Around 98% of these bonds are rated A, AA, or AAA, providing a high level of security. The fund's volatility is typically around 4-5%, lower than the stock market today but higher than short-term municipal funds, offering a balance between risk and return.
MUB's holdings have an average duration of approximately 6.5 years, placing it in the intermediate-term category. This duration allows the fund to benefit from interest rate changes while maintaining a manageable level of risk. The fund's portfolio is heavily weighted towards revenue bonds, which make up about two-thirds of the muni market, providing diverse exposure.
MUB is often used in taxable brokerage accounts for federally tax-exempt income, serving as a core holding in the taxable portion of a bond portfolio. Its low expense ratio of 0.05% makes it an attractive option for investors seeking efficient exposure to the municipal bond market.
The iShares National Muni Bond ETF (MUB) offers investors a stable and efficient way to gain exposure to the U.S. municipal bond market. With its high yield, low expense ratio, and broad investment-grade portfolio, MUB is a popular choice for investors seeking federally tax-exempt income. Its intermediate-term duration and low volatility further enhance its appeal as a core holding in a bond portfolio.
