CGMU vs SCMB

CGMUACapital Group Municipal Income ETF

SCMBASchwab Municipal 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.

SCMB Schwab's take on the core muni sleeve: three basis points, thousands of AMT-free bonds from across the country, and a monthly distribution. Bottom-of-the-table pricing, no frills attached.

Stated mandate

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

SCMB The fund seeks to track, before fees and expenses, the total return of an index representing the U.S. AMT-free municipal bond market.

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.

• SCMB Three basis points a year, against a 0.30% median for muni bond funds. Among the top-graded names in the category, only Vanguard's VTEB matches that fee.
• Follows the ICE AMT-Free Core U.S. National Municipal Index across thousands of bonds and issuers, so no single borrower or state drives the portfolio.
• Plain passive plumbing done well: it stays close to its index, trades actively, and pays monthly. One of the stronger implementations in the muni aisle.

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

• SCMB Launched in 2022, so its live record is shorter than muni staples like MUB and VTEB, even though the strategy is the same broad-market idea.
• Bond math still applies. This is a portfolio of municipal bonds, so share prices move opposite to interest rates.
• National in scope, not single-state like NYF, so it is not built around any one state's tax rules.

Full CGMU profile⁠

Full SCMB profile⁠