Municipal vs taxable bonds
MUB vs BND historical comparison
Compare a national municipal bond fund against a taxable total bond fund across the same historical window.
Modeled result
From 2008 to 2025, MUB finished ahead of BND before tax.
Historical model
Growth of $10,000
2008-01-02 to 2025-12-31
Chart window
All history
Chart window
MUB
Municipal bonds (MUB)
- Ending value
- $17,210
- CAGR
- 3.06%
- Max drawdown
- -13.68%
BND
Taxable bonds (BND)
- Ending value
- $16,710
- CAGR
- 2.89%
- Max drawdown
- -18.58%
Pre-tax results only. The federal exemption for municipal interest is not included in this comparison.
Detailed metrics
Assumptions
$10,000 lump sum; distributions reinvested; monthly rebalancing; 2008-01-02 to 2025-12-31.
FAQ
Are municipal bonds always the better after-tax choice?
No. Municipal yields are lower before tax in most markets, so the federal exemption has to make up the gap. This exhibit stays pre-tax; taxable-equivalent yield requires a separate bracket-specific calculation.
Should municipal bonds go in an IRA or Roth?
Their advantage is the federal tax exemption on interest, which has no value inside an account that is already tax-advantaged. Investors generally hold municipal bonds in taxable accounts for that reason.