CGMU vs MUB

CGMUACapital Group Municipal Income ETF

MUBAiShares National Muni Bond ETF

In short

CGMU Capital Group's answer to the muni index giants: an actively run book of roughly 1,500 bonds, benchmarked to a blend that is deliberately 15% high yield. Federally tax-exempt income, paid monthly, for 0.27% a year.

MUB Municipal bonds, indexed and cheap. Since 2007, MUB has packaged investment-grade national munis into tax-exempt monthly income for five basis points a year, and it sits among the deepest pools in the muni-ETF aisle.

Stated mandate

CGMU The fund seeks high current income exempt from regular federal income tax while preserving capital.

MUB The fund seeks to track an index of investment-grade U.S. municipal bonds, providing diversified exposure to the national municipal-bond market and tax-exempt income.

Why people hold it

• CGMU Active management, not index-tracking. Capital Group's bond desk picks the paper across roughly 1,500 positions rather than buying whatever the muni index prints.capitalgroup.com
• 0.27% a year, below the median muni bond ETF. Cheap for an active mandate, and cost matters double when the whole point is after-tax income.
• The benchmark blend, 85% high grade and 15% high yield in 1 to 17 year maturities, builds in an income tilt and stops short of the 30-year end of the curve.
• A multi-billion-dollar fund that trades actively and distributes monthly. Rare scale for an active muni ETF, and it shows up as easier entry and exit.

• MUB 0.05% a year against a muni-ETF median near 0.30%. In a category built on modest, tax-exempt yields, that fee gap is real money left in the fund.
• The benchmark is AMT-free: the ICE AMT-Free US National Municipal Index screens out munis whose interest can be pulled into the alternative minimum tax.ishares.com
• Tracks its index closely, one of the tighter jobs in its peer group, and distributes monthly. A multi-billion-dollar fund that trades actively.
• Broad investment-grade exposure across the national muni market, spread over thousands of issuers rather than one state's budget.ishares.com

Worth knowing

• CGMU Index rivals VTEB and SCMB charge three basis points. You are paying a real premium here for active security selection.
• That 15% high-yield slice in the benchmark means credit risk a pure high-grade muni fund would not carry.
• The mandate targets income exempt from regular federal income tax. State and local treatment depends on where you live and what the fund holds.capitalgroup.com

• MUB Two rivals undercut it: VTEB and SCMB both run 0.03%. A two-basis-point gap is small, but it is a gap.
• A bond fund with no maturity date to hold to. Share prices move with interest rates and muni credit conditions, both directions.
• National by design, so no single-state tilt and no in-state tax angle. iShares runs state-specific muni funds such as NYF for that job.

Full CGMU profile⁠

Full MUB profile⁠