CGHM vs FMHI

CGHMACapital Group Municipal High-Income ETF

FMHIBFirst Trust 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.

FMHI Active muni high yield that leans in: at least half the portfolio in junk-rated or unrated bonds, hand-picked rather than indexed, with federally tax-exempt income paid monthly. Running since 2017, and priced above the category median for the credit work.

Stated mandate

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

FMHI The Fund seeks federally tax-exempt income as its primary objective and long-term capital appreciation as its secondary objective.

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.

• FMHI Does what the label says: at least 80% of net assets in bonds paying federally tax-exempt interest, spread across roughly 800 positions.ftportfolios.com
• Genuinely active, not an index in disguise. Managers choose credits bond by bond, including beaten-up issues an index-rules screen would skip.sec.govftportfolios.com
• A billion-dollar fund that pays monthly and trades at moderate volume, with a record going back to its 2017 launch rather than a recent debut.

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.

• FMHI Costs more than the index heavyweights: above the category median, against 0.32% at HYD and 0.35% at HYMB. The stock-picking has to cover that gap.
• At least half the book is below investment grade or unrated, and the prospectus permits bonds already in default, so downgrades bite harder than in a core muni fund.sec.gov
• Clean execution of its mandate, but in a crowded high-yield muni field it lands in the lower half overall, mostly on price and credit risk.

Full CGHM profile⁠

Full FMHI profile⁠