At a glance
FCAL charges 0.65% a year, above the 0.34% average of the 7 funds most like it (the 6th cheapest of 8). It has $218.7M in assets, the 8th largest of that group; it paid 3.85% of its price in distributions over the past 12 months, monthly. Over the past year it returned −0.1% with distributions reinvested, 5th of those 8 funds; over three years it returned +4.0% a year. At its worst it fell 14.8% in the 2020 crash (S&P 500: 33.7%) and 13.0% in the 2022 bear market (S&P 500: 24.5%), and was back at its earlier high 9 months and 37 months after the lows. Its ten largest positions make up 10.6% of the fund, out of 278 in all.
The short version
First Trust California Municipal High Income ETF (FCAL) is an actively managed fund of California municipal bonds, which are debts of cities, agencies and authorities. It aims to pay income exempt from federal and California income taxes. Unlike most muni ETFs, it can hold up to half its assets in below-investment-grade 'high yield' bonds. That aims for more income but adds credit risk. Its 0.65% expense ratio is well above the 0.34% average of similar funds.
Price history
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FCAL -0.1% over the year to Oct 27, 2026, total return with distributions reinvested.
How it has behaved
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | Since start | |
|---|---|---|---|---|---|---|
| FCAL official prospectus, to Dec 31, 2024 | — | +2.07% | — | +0.94% | — | +2.45% |
| FCAL price data to Oct 27, 2026 | -0.8% | -0.1% | +4.0% | +0.3% | — | +2.3% |
- Over the year to Oct 27, 2026, FCAL returned -0.1%, 5th of 8 among similar funds.
- Its 5-year annualized return was +0.3%.
- In the 2020 COVID crash it fell 14.8% and regained its old high 8.9 months after the low.
- Its worst full calendar year was 2022 (-9.5%); its best was 2019 (+9.4%).
- The deepest fall in its price history was 14.8% (Feb 28, 2020 to Mar 20, 2020), recovered by Dec 15, 2020.
Show as a table
| Year | Price data | Prospectus (official) |
|---|---|---|
| 2026 (to date) | -0.8% | — |
| 2025 | +3.5% | — |
| 2024 | +1.9% | +2.07% |
| 2023 | +6.0% | +5.88% |
| 2022 | -9.5% | -9.40% |
| 2021 | +3.3% | +3.30% |
| 2020 | +3.6% | +3.60% |
| 2019 | +9.4% | +9.68% |
| 2018 | +0.4% | +1.10% |
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Before this security existed |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Lost 13.2% over that stretch · deepest drop along the way 14.8%, back to its old high 8.9 months after the low |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Lost 11.7% over that stretch · deepest drop along the way 13%, back to its old high 36.5 months after the low |
Dividends and income
Show as a table
| Year | Per share | Change |
|---|---|---|
| 2026 (to date) | $1.4200 | |
| 2025 | $1.7300 | +16.9% |
| 2024 | $1.4800 | +10.4% |
| 2023 | $1.3400 | +16.5% |
| 2022 | $1.1500 | +0.9% |
| 2021 | $1.1400 | -5.0% |
| 2020 | $1.2000 | -18.4% |
| 2019 | $1.4700 | -5.8% |
| 2018 | $1.5600 |
What's inside
As of Jul 31, 2026, the fund held 278 securities; the ten largest made up 10.55% of assets.
| Holding | Weight | |
|---|---|---|
| SAN FRANCISCO CITY AND COUNTY AIRPORT COMMISSION (CA) Bonds and notes | 1.39% | |
| CALIFORNIA ST ENTERPRISE DEV AUTH Bonds and notes | 1.21% | |
| SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY (CA) Bonds and notes | 1.20% | |
| STOCKTON-EAST WTR DIST CALIF Bonds and notes | 1.07% | |
| CALIFORNIA HEALTH FACILITIES FINANCING AUTHORITY (CA) Bonds and notes | 0.96% | |
| FRESNO CALIF JT PWRS FING AUTH Bonds and notes | 0.96% | |
| CENTRAL VALLEY ENERGY AUTHORITY (CA) Bonds and notes | 0.96% | |
| CALIFORNIA COMMUNITY CHOICE FINANCING AUTHORITY (CA) Bonds and notes | 0.95% | |
| CALIFORNIA STATE PUBLIC WORKS BOARD (CA) Bonds and notes | 0.93% | |
| ANAHEIM HOUSING AND PUBLIC IMPROVEMENTS AUTHORITY (CA) Bonds and notes | 0.91% | |
| IRVINE RANCH WATER DISTRICT (CA) Bonds and notes | 0.91% | |
| CALIFORNIA MUNICIPAL FINANCE AUTHORITY (CA) Bonds and notes | 0.91% | |
| CALIFORNIA MUNICIPAL FINANCE AUTHORITY (CA) Bonds and notes | 0.91% | |
| CALIFORNIA MUNICIPAL FINANCE AUTHORITY (CA) Bonds and notes | 0.89% | |
| FONTANA CALIF Bonds and notes | 0.85% |
By country
United States 98.61%By issuer
Municipalities 98.61%The bonds mature in 17.1 years on average (weighted by size), with an average coupon of 4.82%.
Source: N-PORT holdings report as of Jul 31, 2026. Cash, money-market funds and derivatives are shown separately from the securities list.What changed recently
- Over the three months to Jul 31, 2026, investors added a net $17.2M (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: +0.51%, +0.80%, -1.83%.
How it works
FCAL doesn't track an index. First Trust's managers pick the bonds. At least 80% of net assets go into municipal bonds whose interest is exempt from regular federal and California income taxes, and at least 80% must come from California issuers. Up to 20% can come from US territories such as Puerto Rico and Guam. Holdings include general obligation bonds, which are backed by an issuer's taxing power, revenue bonds, which are repaid from a project's income such as an airport or water system, and private activity bonds.
Credit rules shape the portfolio. At least half must be investment grade when bought, meaning rated BBB-/Baa3 or higher by at least one rating agency, or unrated but judged comparable. Up to half can be high yield, and up to 10% can be distressed bonds already in default. The fund can buy bonds of any maturity and may use futures, though it held no derivatives as of July 31, 2026.
On that date it held 278 bonds, and the top 10 made up 10.55% of assets. The largest were a San Francisco airport bond due 2049 (1.39%), a California Enterprise Development Authority bond (1.21%) and a Southern California Public Power Authority bond (1.20%). Average maturity was 17.1 years, so prices react noticeably to rate changes. Turnover was 58%.
What it really costs
- FCAL charges 0.65% a year, versus an average of 0.34% for the similar funds below (6th of 8, cheapest first).
Structure and tax notes
- Bond prices move opposite to interest rates; the longer the maturities it holds, the more its price reacts to rate changes.
In a retirement portfolio
FCAL's main purpose is monthly income that is generally exempt from federal and California income taxes, with a high-yield tilt to raise that income.
For California residents, FCAL offers monthly income that is generally free of federal and state income tax. Its trailing 12-month yield was 3.85% as of October 27, 2026, or about $1.83 a share. That income has come with real swings. The fund fell 14.8% between February 28 and March 20, 2020, and took about nine months to recover. As rates rose in 2022 it dropped 13% and didn't regain its peak until October 16, 2025, more than three years later. Its worst calendar year was 2022, at -9.4%. A retiree who had to sell shares during that stretch would have locked in losses. The fund launched in 2017, so it has no 2008 record. Its 0.65% expense ratio is nearly double the 0.34% peer average. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- California taxpayers seeking monthly income generally exempt from federal and state income tax, with a 3.85% trailing yield as of October 27, 2026.
- Investors comfortable with up to half the fund in below-investment-grade munis, chosen by First Trust's active managers rather than an index.
- Those wanting broad California exposure across airports, power, water and health care issuers, spread over 278 bonds as of July 31, 2026.
Look elsewhere if
- Cost-focused investors: FCAL's 0.65% expense ratio compares with 0.03% for VTEB and 0.18% for JMUB.
- Non-California residents, who generally lose the state tax exemption that is the fund's main distinguishing feature.
- Those needing short-term stability: average maturity was 17.1 years, and the fund took over three years to recover from its 2022 drop.
Close alternatives
Matched by bond funds with the closest average maturity and issuer mix (N-PORT).
| Fund | Avg. maturity | Cost | Net assets | 1 yr | 3 yr |
|---|---|---|---|---|---|
| FCAL this fund | 17.1 yrs | 0.65% | $218.7M | -0.1% | +4.0% |
| FMB First Trust Managed Municipal ETF | 15.5 yrs | 0.65% | $2.05B | 0.0% | +4.3% |
| JMUB JPMorgan Municipal ETF | 16.7 yrs | 0.18% | $8.75B | -0.2% | +4.4% |
| TFI SPDR Nuveen Bloomberg Municipal Bond ETF | 15.1 yrs | 0.23% | $3.12B | -0.8% | +3.9% |
| HYD VanEck High Yield Muni ETF | 19.2 yrs | 0.32% | $4.43B | +0.9% | +5.5% |
| VTEB Vanguard Tax-Exempt Bond ETF | 14.5 yrs | 0.03% | $48.52B | +0.1% | +4.4% |
| BAB Invesco Taxable Municipal Bond ETF | 14.5 yrs | 0.28% | $900.7M | -2.4% | +5.8% |
| FMHI First Trust Municipal High Income ETF | 20.2 yrs | 0.7% | $994.3M | +0.2% | +5.8% |
Questions investors ask
Is FCAL tax-free in California?
Mostly, for California residents. FCAL aims to pay income exempt from regular federal income tax and California income tax, and keeps at least 80% of net assets in bonds that qualify. There are two caveats. Some holdings may be private activity bonds, whose interest can be subject to the federal alternative minimum tax. And because the fund handles some or all redemptions in cash, the prospectus says it may be less tax-efficient than ETFs that don't, which can mean taxable capital gains distributions.
Does FCAL pay monthly dividends?
Yes. FCAL pays distributions monthly. Over the 12 months to October 27, 2026, it paid about $1.83 a share, a trailing yield of 3.85%. Payments can change as bonds mature, get called or are replaced. Call risk matters here: when rates fall, issuers may pay off higher-interest bonds early, and the fund may have to reinvest the money at lower yields, which can shrink future income.
FCAL vs VTEB: what's the difference?
The biggest differences are cost, size and approach. FCAL charges 0.65% a year, while Vanguard Tax-Exempt Bond ETF (VTEB) charges 0.03%. VTEB had about $48.5 billion in net assets as of July 31, 2026, compared with about $219 million for FCAL. FCAL is actively managed, focuses on California and can hold up to 50% in high-yield bonds. Over the three years through late October 2026, VTEB returned 4.4% a year and FCAL 4.0%.
Does FCAL hold junk bonds?
It can. FCAL must keep at least 50% of net assets in investment-grade bonds when it buys them, meaning rated BBB-/Baa3 or higher, so up to half can be high-yield or 'junk' bonds. Up to 10% can be distressed bonds already in default. Lower-rated bonds pay more interest but are more likely to miss payments and can fall sharply when credit worries rise. Its heavy focus on California adds risk from that state's budget and economy.
Is FCAL good for retirement income?
It may suit California retirees who want monthly, mostly tax-exempt income, but it has drawbacks. Its prospectus shows a 5-year average annual return of 0.94% through December 31, 2024. As of October 27, 2026, its 3-year return ranked 7th of 8 among similar funds. It lost 9.4% in 2022 and didn't regain its prior peak until October 2025. Its 0.65% expense ratio is also higher than most comparable funds.