Schwab Municipal Bond ETF

SCMB

Börsenwert 3,17 Mrd. $

Bond ETFs can be a safer alternative to stocks during market volatility. Another appeal is their potential to protect against inflation.

Whether fixed income investors are focused on locking in yield, managing duration risk, or building resilient core portfolios, bond ETFs have been seeing elevated demand this year.

In the first Federal Open Market Committee (FOMC) meeting under new Federal Reserve Chairman Kevin Warsh, the central bank, as expected, stood pat with interest rates. Add to that, Fed funds futures imply almost zero chance of a July rate cut.

For high earners hunting tax-free monthly income, the Invesco National AMT-Free Municipal Bond ETF (NYSEARCA:PZA) has become a reliable workhorse.

In 2021, Elon Musk paid over $11 billion to the IRS (his 2026 federal tax may be significantly larger, due to the SpaceX IPO).

For investors in the top federal tax bracket, the Invesco National AMT-Free Municipal Bond ETF (NYSEARCA:PZA | PZA Price Prediction) offers something rare: a monthly paycheck the IRS cannot touch.

Municipal bonds are off to solid starts in 2026. That indicates advisors and income investors can revisit the asset class known for safety.

The end result of the investment strategy here seems not worth it to me. The tax breaks on municipal income make them a good fit for higher-rate taxpayers looking for income. Holding the full universe, covering the index, is a sensible diversification strategy.

With the GOP controlling Congress and the White House, current tax rates from 2017 are likely to extend beyond 2025. The Schwab Municipal Bond ETF offers a low-cost, tax-efficient investment in U.S. investment-grade, tax-exempt bonds, with a forward yield of 3.34%. The ETF tracks the ICE AMT-Free Core U.S. National Municipal Index, focusing on high-quality bonds exempt from federal taxes and AMT.