Which Is the Better Government Bond ETF, iShares' MUB or Fidelity's FIGB?

Robert Izquierdo, The Motley Fool

Tue, May 19, 2026 at 10:04 AM EDT 4 min read

The iShares National Muni Bond ETF (NYSEMKT:MUB) and Fidelity Investment Grade Bond ETF (NYSEMKT:FIGB) both provide exposure to high-quality debt, but they serve different roles based on an investor's tax situation and credit preference.

Investors looking for stability often turn to investment-grade debt, but the choice between the iShares fund and the Fidelity fund involves more than just picking a bond ETF. These two funds differ in their tax treatment, credit exposure, and cost structures, making each suitable for distinct portfolio goals within a fixed-income allocation.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.

The iShares fund is the more affordable option with a 0.05% expense ratio, compared to 0.36% for the Fidelity fund. However, FIGB offers a higher payout, with a trailing yield approximately 0.9 percentage points above its peer.

Performance & risk comparison

What's inside

The Fidelity Investment Grade Bond ETF is a core fixed-income fund that holds over 800 positions across various high-grade sectors. Its sector exposure is primarily in government bonds, which comprises 45.17% of its holdings. Its largest positions are in various U.S. Treasury bonds and notes. Launched in 2021, the fund has paid $1.77 per share over the trailing 12 months. This fund may appeal to those seeking broader market exposure across various investment-grade sectors, such as U.S. Treasuries and corporate credit.

In contrast, the iShares National Muni Bond ETF focuses exclusively on investment-grade U.S. municipal bonds, which are often exempt from federal income taxes. Its portfolio is strictly concentrated in fixed-income securities without an equity sector breakdown. The fund lists 6,538 holdings, making it highly diversified. Launched in 2007, the iShares fund has a trailing-12-month dividend of $3.39 per share. For investors in high tax brackets, the lower yields of the iShares fund may be more attractive on a tax-equivalent basis.

For more guidance on ETF investing, check out the full guide at this link.

What this means for investors

Investing in government bonds delivers stable, low-risk income. Two funds offering exposure in this area are the Fidelity Investment Grade Bond ETF (FIGB) and iShares National Muni Bond ETF (MUB). Choosing between them comes down to a few key considerations.