CGHM vs MFLX

CGHMACapital Group Municipal High-Income ETF

MFLXCFirst Trust Flexible 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.

MFLX Launched in 2016 as a basket of closed-end muni funds, MFLX was rebuilt in 2022 into a hands-on portfolio of roughly 80 high-yield munis, with closed-end-style leverage available through tender option bond trusts.

Stated mandate

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

MFLX The Fund seeks current income by investing at least 80% of its net assets in municipal debt securities whose interest is exempt from regular federal income 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.

• MFLX Go-anywhere active mandate: any maturity, duration or credit quality, with a stated tilt toward longer, higher-yielding bonds rated below investment grade or unrated.sec.gov
• The 80% federally tax-exempt policy is fundamental, meaning First Trust cannot change it without a shareholder vote.ftportfolios.com
• A roughly 80-bond portfolio that pays monthly, concentrated enough that individual credit calls move the needle.
• Can borrow through tender option bond trusts and hold the inverse floaters: closed-end-fund plumbing inside an ETF wrapper.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.

• MFLX At 0.49%, it charges above the category median of 19 funds, and above index-based peers HYD (0.32%) and HYMB (0.35%).
• Leverage plus a long-duration, lower-rated tilt cuts both ways: price swings can run sharper than a plain investment-grade muni fund's.sec.gov
• It stays small and trades lightly, so spreads can be wider than in the category's heavyweights.

Full CGHM profile⁠

Full MFLX profile⁠