CGHM vs FCAL

CGHMACapital Group Municipal High-Income ETF

FCALCFirst Trust California Municipal High Income ETF

In short

CGHM Index high-yield muni funds stop where the ratings stop. CGHM is Capital Group's active version: built to lean into lower-rated and unrated tax-exempt bonds, with the income paid out monthly.

FCAL A California-only muni fund that actually reaches for yield: at least half investment grade, up to half high yield, actively picked. Double tax exemption at home, at 0.65% a year.

Stated mandate

CGHM The fund seeks a high level of current income that is exempt from regular federal income tax.

FCAL FCAL seeks current income exempt from regular federal and California income taxes, with long-term capital appreciation as a secondary objective. Normally, it invests at least 80% of net assets in municipal debt securities whose interest is exempt from those taxes.

Why people hold it

• CGHM The mandate is the whole point: at least 60% in bonds rated BBB+/Baa1 or below, or unrated, the corner of the muni market index funds cap or skip.yahoo.comcapitalgroup.com
• Income lands monthly and is exempt from regular federal income tax, spread across roughly 600 bond positions rather than a few big credits.
• A young fund that is already a multi-billion-dollar one, and what it holds lines up closely with the mandate it advertises.
• Sits in the upper half of the muni ETF field we grade, a solid showing for an active fund fishing in the market's messier waters.

• FCAL Income exempt from regular federal and California income taxes, so in-state holders dodge two tax bills instead of one.ftportfolios.com
• Up to half the portfolio can sit below investment grade, a credit dial most California muni funds never touch; at least half stays investment grade.sec.gov
• Actively managed since 2017, around 300 bonds deep, and it pays monthly.sec.gov

Worth knowing

• CGHM At 0.34% it runs above the 0.30% muni cohort median, and well above plain index core muni funds like VTEB (0.03%) and MUB (0.05%).
• Lower-rated and unrated munis carry more credit and liquidity risk than investment-grade muni funds, so swings can be sharper when credit gets stressed.yahoo.com
• Launched in 2024, so the history here is short and has not yet run through a full credit cycle.

• FCAL 0.65% a year, no waiver trimming it, above the category median. National high-income muni peers like HYD (0.32%) and FMUB (0.30%) charge less.
• Credit risk is the trade-off: the high-yield sleeve can include bonds already in default, and results ride on California issuers alone.sec.gov
• Thinly traded and on the small side. Limit orders matter, and the market price can drift from the value of the bonds inside.

Full CGHM profile⁠

Full FCAL profile⁠