First Trust Managed Municipal ETF

First Trust Managed Municipal ETF (FMB) is an actively managed bond fund. It buys municipal bonds whose interest is exempt from regular federal income tax, and it does not follow an index. Its managers can put up to 35% of assets in below-investment-grade ("junk") bonds. As of October 27, 2026, the fund's trailing yield was 4.14%, paid monthly. The trade-off is cost: 0.39% a year, against a 0.17% average for similar funds.

• Over the year to Oct 27, 2026, FMB returned 0.0%, 3rd of 8 among similar funds.
• Its 5-year annualized return was +0.5% and its 10-year +2.0%.
• In the 2020 COVID crash it fell 13.9% and regained its old high 8.4 months after the low.
• Its worst full calendar year was 2022 (-9.9%); its best was 2019 (+8.3%).
• The deepest fall in its price history was 14.1% (Jul 19, 2021 to Oct 26, 2022), recovered by Oct 16, 2025.

As of Jul 31, 2026, the fund held 1,276 securities; the ten largest made up 5.04% of assets.

The bonds mature in 15.5 years on average (weighted by size), with an average coupon of 4.81%.

• Over the three months to Jul 31, 2026, investors added a net $68.8M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +0.46%, +0.72%, -1.80%.

FMB does not track an index. First Trust manages it actively, aiming first for income exempt from regular federal income tax and second for long-term growth. At least 80% of net assets go into municipal bonds of any maturity: loans to states, cities, US territories and agencies. These include general obligation bonds, backed by taxing power, and revenue bonds, repaid from projects such as airports or utilities.

The manager's six-step process tests how bonds may react to changes in interest rates and credit spreads (the extra yield riskier bonds pay), sets sector overweights and underweights, researches new issues, judges how easily a bond can be resold, watches for credit changes and reviews what drove returns. At least 65% must be investment grade, rated in the top four credit tiers; up to 35% can be lower-rated "junk" bonds. Derivatives such as futures are allowed.

As of July 31, 2026, FMB held 1,276 positions, none of them derivatives, with an average maturity of 15.5 years. The largest, a Meade County, Kentucky bond, was just 0.79%. Annual turnover was 32%. Some bonds may be subject to the alternative minimum tax. Because shares can be created and redeemed for cash, the fund may have to sell bonds, which can make it less tax-efficient than ETFs that swap securities in kind.

• FMB charges 0.39% a year, versus an average of 0.17% for the similar funds below (8th of 8, cheapest first).

FMB's main job is to pay monthly income that is exempt from regular federal income tax, and it reaches for extra yield with some lower-rated bonds.

FMB paid a 4.14% trailing yield as of October 27, 2026, in monthly distributions. The tax exemption matters most in a taxable account; inside an IRA it adds little. The fund launched in 2014, so it has no record from the 2008 crisis. In March 2020 it fell about 14% in under three weeks and recovered in about 8 months. Its worst calendar year was 2022, at -9.66%. Its deepest drop, 14.1% from July 2021 to October 2022, took about 36 months to recover, until October 2025. Someone who had to sell shares in late 2022 would have locked in that loss. The annual cost is 0.39%, the highest of the eight comparable funds. Past results don't predict future ones, and a retirement plan should look at the whole portfolio, not one fund.

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