This ETF does not track a specific index and is actively managed, focusing on federally tax-exempt high-yield municipal bonds. Below-investment-grade or unrated municipal bonds make up a substantial portion of the portfolio, with the goal of maximizing after-tax real returns.

It is well suited for high-income investors with a heavy federal tax burden who prioritize after-tax interest income and can tolerate the credit risk of high-yield municipal bonds.

The ETF was launched in 2024 by Capital Group as an actively managed product.

To maximize federally tax-exempt interest income, the fund maintains a high allocation to below-investment-grade or unrated municipal bonds. Within Capital Group's multi-manager structure, multiple portfolio managers each independently build portions of the portfolio, conducting in-depth credit analyses to assess the financial health of each issuer.

• Pursues higher interest income than peers in the same category by concentrating on high-yield municipal bonds
• Applies Capital Group's multi-manager research approach

Assets under management (AUM) stand at $3.7B, and the total expense ratio is 0.34% annually.

Credit risk is higher than that of investment-grade passive municipal bond ETFs such as MUB and VTEB, but the federally tax-exempt interest yield is relatively higher.

While municipal bonds broadly saw price adjustments in a high-interest-rate environment, the real value of federally tax-exempt interest income has come into focus, sustaining interest from high-income investors. With a high allocation to high-yield municipal bonds, the fund is seen as having room for price recovery once interest rates stabilize.

Fund inflows have been steady, driven by attention to after-tax return advantages among high-income investors facing high federal income tax rates. The credibility of Capital Group's active management brand has contributed to inflows from institutional and high-net-worth individual investors.

Federally tax-exempt high-yield interest income is the key strength, but investors must also take on high-yield credit risk and interest rate sensitivity.

The MUB and VTEB shown in the table are passive municipal bond ETFs weighted toward investment-grade names, offering lower credit risk but also relatively lower interest yields. CGMU is Capital Group's investment-grade municipal bond active ETF and serves as a more conservative alternative within the same fund family. CMF is an ETF specializing in California municipal bonds, useful as a reference for investors who prefer a region-focused strategy. JMUB, which takes a similar high-yield municipal bond approach, is also worth comparing. Within the Capital Group municipal bond lineup, investors can choose between CGMU (investment-grade) and CGHM (high-yield) based on their risk tolerance.

These are key points to review before investing in CGHM. The federal tax benefits and high-yield returns are strengths, but credit risk and tax conditions should be checked in advance.

Credit risk and interest rate sensitivity tied to the high-yield municipal bond focus are the main drivers of variability. During economic downturns or deterioration of municipal fiscal conditions, holdings face risks of rating downgrades and defaults, while rising interest rates can pressure bond prices.

For high-income investors with a heavy federal tax burden, the ETF stands out as a compelling choice for after-tax interest income. Those seeking lower credit risk may consider CGMU, Capital Group's investment-grade municipal bond ETF, while investors preferring a fully passive approach can reasonably compare MUB and VTEB.