PZA vs SCMB

PZABInvesco National AMT-Free Municipal Bond ETF

SCMBASchwab Municipal Bond ETF

In short

PZA Most muni ETFs hand you the whole yield curve. PZA goes long on purpose: its index only takes bonds with at least 15 years left to maturity, all screened to stay out of the alternative minimum tax. Income lands monthly.

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

PZA The fund seeks to track an index of tax-exempt municipal debt that is not subject to the alternative minimum tax.

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

• PZA The long-end specialist. The index takes only investment-grade munis with at least 15 years to final maturity, so duration is the design choice, not a leftover.invesco.com
• Holdings are screened to be AMT-free, aimed at filers who need tax-exempt interest that does not get pulled back in by the alternative minimum tax.invesco.com
• Trading since 2007, now a multi-billion-dollar fund that changes hands actively, with tracking that has stayed tight to its benchmark.
• Pays monthly, spreads across thousands of individual bonds, and the index is rebalanced and reconstituted every month.invesco.com

• 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

• PZA At 0.28% it sits just under the typical muni ETF, but broad-market rivals VTEB and SCMB charge 0.03%. The long-maturity focus is what carries the premium.
• Long bonds swing harder when rates move, in both directions. This is the most rate-sensitive stretch of the muni market, by construction.invesco.com
• The fund samples its index instead of buying every bond in it, so the portfolio can differ modestly from the benchmark it follows.invesco.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 PZA profile⁠

Full SCMB profile⁠