FMB vs SCMB

FMBBFirst Trust Managed Municipal ETF

SCMBASchwab Municipal Bond ETF

In short

FMB Most muni ETFs hand you an index and call it a day. FMB is the hands-on one: First Trust's managers pick the bonds, spread across roughly 1,300 issues, and pay out federally tax-exempt income monthly. Running since 2014.

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

FMB The fund normally invests at least 80% of its assets in federally tax-exempt municipal securities, including general-obligation, revenue, project, pre-refunded, and related municipal money-market or synthetic securities.

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

• FMB Active by design. A manager chooses the bonds rather than copying a benchmark, chasing federally tax-exempt income first and long-term appreciation second.sec.gov
• Roughly 1,300 municipal issues in the portfolio, so no single school district, hospital or toll road steers the whole fund.
• Income arrives monthly, and a multi-billion-dollar asset base plus a 2014 launch make it one of the more seasoned active muni ETFs on the board.
• The portfolio has stayed tight to the tax-exempt muni mandate it advertises, which puts it in the upper half of a very crowded muni field.

• 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

• FMB Active costs money: 0.39% a year against index heavyweights like VTEB and SCMB at 0.03%. That fee gap is the hurdle the stock picking works against.
• The exemption is from regular federal income tax. State and local taxes, and gains on the shares themselves, are a separate conversation with your accountant.sec.gov
• Moderately traded rather than a volume monster, and municipal bonds themselves trade thinly, which can widen the spread you pay on the way in or out.

• 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 FMB profile⁠

Full SCMB profile⁠