Guide · US Municipal Bond
Best municipal bond ETFs
Muni funds hold state and local government debt. Interest is federally tax-exempt, and in-state funds add a state exemption. At a 24% federal bracket, 3.5% tax-exempt is the same as about 4.6% taxable. In a 12% bracket, or in an IRA, that math usually loses to Treasuries. VTEB is 3 bps; MUB is the iShares twin at 5.
Published May 18, 2026 · Updated Sep 16, 2026 · Fund data as of Oct 24, 2026
Why the ranking looks like this
Municipal funds carry the highest tax-efficiency scores in the catalog — federally tax-exempt distributions waive the distribution-rate penalty that pulls every other bond category's tax-efficiency down. This shows up clearly in the composite: the broad national funds at the top of the table score in the mid-to-high 90s, above every taxable bond category. The table also carries short-duration and single-state funds, which trade some of that breadth for lower rate sensitivity or an extra layer of state-tax exemption.
See the methodology for the full formula behind each sub-score.
The funds
This order is editorial. The composite on each card is live. The full score-ranked table is on the category page.
-
97
composite / 100
Vanguard's national muni fund. 3 bps; the lowest-cost broad muni ETF on the market. Tracks the S&P National AMT-Free Muni Bond Index — investment-grade, no AMT exposure, full national coverage.
- Expense
- 0.030%
- AUM
- $51.71B†
- Issuer
- Vanguard
- Detail
- VTEB page →
-
97
composite / 100
iShares' national muni fund. 5 bps; near-identical exposure to VTEB and a longer track record. Functions as a tax-loss-harvesting partner to VTEB — different index family, near-identical risk and yield profile.
- Expense
- 0.050%
- AUM
- $46.62B
- Issuer
- iShares
- Detail
- MUB page →
† Whole fund: this ETF is one share class of a fund that also sells mutual-fund shares, and the figure covers all of them. Our sources don't report the ETF class on its own.
Also in the category
Other funds in the same category, ranked by composite score.
When munis are the right tool
The break-even decision is purely arithmetic: a muni fund yielding M is equivalent (pre-tax) to a taxable bond fund yielding M / (1 - your marginal tax rate). At a 24% federal bracket, a 3.5% muni yield is equivalent to a 4.6% taxable yield. Higher brackets and state-tax-aware investors get more benefit. At the 12% bracket or in a tax-advantaged account, munis lose their edge and a Treasury or aggregate fund delivers higher after-tax yield.
In-state vs national
A national muni fund like VTEB is exempt from federal tax only; an investor in a high-tax state can buy a single-state muni fund (e.g. iShares CMF for California, NYF for New York) for additional state-tax exemption on the in-state portion. Both are in the catalog and sit in the same table as the national funds. The trade-off is a narrower issuer pool against the extra exemption, and the size of that exemption tracks the state rate.
Funds are pulled from the live composite for this category. Notes are editorial and refresh with the catalog.
PlainIndex publishes data and editorial commentary — nothing here is personalized investment advice. Read the methodology for how the scores referenced here are computed.