Avantis Core Municipal Fixed Income ETF

Avantis Core Municipal Fixed Income ETF (AVMU), from American Century Investments, is an actively managed fund that holds mostly investment-grade municipal bonds. Interest on these bonds is generally exempt from federal income tax. It does not track an index. Instead, its managers tilt toward the parts of the muni market they expect to earn more. It charges 0.15% a year, more than larger muni ETFs such as MUB (0.05%) and VTEB (0.03%).

• Over the year to Oct 27, 2026, AVMU returned -1.1%, 7th of 8 among similar funds.
• Its 5-year annualized return was +0.4%.
• Its worst full calendar year was 2022 (-7.3%); its best was 2023 (+5.2%).
• The deepest fall in its price history was 12.4% (Jul 19, 2021 to Oct 25, 2022), recovered by Oct 7, 2025.

As of Aug 31, 2026, the fund held 543 securities; the ten largest made up 11.84% of assets.

The bonds mature in 12.4 years on average (weighted by size), with an average coupon of 4.45%.

• Over the three months to Aug 31, 2026, investors added a net $13.8M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +0.51%, -2.16%, -0.27%.

AVMU is actively managed and does not try to copy an index. It must keep at least 80% of its net assets in municipal bonds whose interest is exempt from federal income tax. These are debts issued by states, cities, public agencies, the District of Columbia or US territories. They include general obligation bonds, which are backed by the issuer's taxing power, and revenue bonds, which are repaid from a specific source of income such as tolls or utility bills. The fund invests mainly in investment-grade bonds, meaning bonds rated as lower credit risk.

The managers sort the muni market into groups by sector, credit rating and duration (how sensitive a bond's price is to changes in interest rates). They estimate the return each group's yields imply, then weight the portfolio toward the groups with higher expected returns. Before trading, they also weigh trading costs and taxes. Portfolio turnover was 16%.

As of August 31, 2026, the fund held 543 bonds, and the top 10 made up 11.84% of assets. The largest positions were San Antonio Public Facilities Corp (about 2.1%), JobsOhio Beverage System (1.6%) and San Jacinto Community College District (1.5%). The average maturity was 12.4 years. The fund may use futures or swaps, but it held none on that date. It may also lend securities. It can create and redeem shares for cash, which can make it less tax-efficient than funds that use in-kind transfers.

• AVMU charges 0.15% a year, versus an average of 0.22% for the similar funds below (4th of 8, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $15 in the first year and $192 over 10 years (assuming a 5% annual return).

It pays monthly income that is generally exempt from federal income tax, which helps most in a taxable account.

AVMU may add monthly, federally tax-exempt income to a taxable account. Its trailing 12-month yield was 3.62% as of October 27, 2026. Inside an IRA or 401(k), the tax break adds little. The fund launched in December 2020, so it has no record from the 2008 crisis or the 2020 crash. In the 2022 bond sell-off it fell 11.2% and took about 24 months to recover. Its deepest drop, 12.4% from July 2021 to October 2022, took about 35 months to win back. Its worst calendar year was 2022, at -7.56%. Someone who had to sell shares for cash during that stretch would have locked in losses. Costs are modest: in the SEC's standard example, $10,000 costs $15 in year one and $192 over 10 years. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by bond funds with the closest average maturity and issuer mix (N-PORT).