Invesco California AMT-Free Municipal Bond ETF

Invesco California AMT-Free Municipal Bond ETF (PWZ) tracks an index of long-term, investment-grade California municipal bonds. Their interest is exempt from federal income tax and the alternative minimum tax. As of August 31, 2026, its bonds averaged 22.3 years to maturity, so its price reacts more to interest rates than shorter muni funds do. It charges 0.28% a year, below the 0.39% average of similar funds.

• Over the year to Oct 27, 2026, PWZ returned -1.5%, 7th of 8 among similar funds.
• Its 5-year annualized return was -0.5% and its 10-year +1.6%.
• In the 2020 COVID crash it fell 13.1% and regained its old high 4.6 months after the low.
• Its worst full calendar year was 2022 (-11.3%); its best was 2014 (+15.5%).
• The deepest fall in its price history was 21.5% (Jan 15, 2008 to Dec 16, 2008), recovered by Sep 4, 2009.

As of Aug 31, 2026, the fund held 1,245 securities; the ten largest made up 5.36% of assets.

The bonds mature in 22.3 years on average (weighted by size), with an average coupon of 4.63%.

• Over the three months to Aug 31, 2026, investors added a net $117.7M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +1.25%, -2.34%, -0.55%.

PWZ tracks the ICE BofA California Long-Term Core Plus Municipal Securities Index, which ICE Data Indices compiles and calculates. The index holds tax-exempt, US dollar bonds issued by California, US territories and their local governments and agencies. All are exempt from the federal alternative minimum tax (AMT), a parallel tax that can apply to some muni interest. To qualify, a bond needs at least 15 years left to maturity, a fixed coupon, at least $25 million outstanding per maturity and an investment-grade rating, averaged across S&P, Moody's and Fitch. The index had 1,259 bonds as of October 31, 2025.

The fund puts at least 80% of its assets in index bonds. It uses sampling, which means it buys a representative subset rather than every bond. As of August 31, 2026, it held 1,245 positions, and the top ten made up just 5.36% of assets. The largest was a Kaiser Permanente bond issued through the California Health Facilities Financing Authority, at 0.86%. Next came bonds for Cedars-Sinai Medical Center and the University of California Medical Center. Turnover was 5%.

Two mechanics matter. First, the long maturities make prices swing sharply when rates move. Second, issuers can call (repay early) high-coupon bonds when rates fall, and the fund then has to reinvest at lower yields.

• PWZ charges 0.28% a year, versus an average of 0.39% for the similar funds below (3rd of 8, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $29 in the first year and $355 over 10 years (assuming a 5% annual return).

Its main draw is monthly interest that is exempt from federal tax, paid by long-term California municipal bonds, though its price can drop sharply when rates rise.

PWZ could provide monthly income that is exempt from federal income tax. Its trailing 12-month yield was 3.99% as of October 27, 2026. Costs are low: in the SEC's standard example on $10,000, expenses come to $29 in the first year and $355 over ten years. The trade-off is interest-rate risk from its long maturities. The fund fell 21.5% between January and December 2008 and took 8.6 months to recover. In March 2020 it dropped 13.1% in two weeks and recovered by August. From January to September 2022 it lost 15.7%, and it did not regain its peak until February 2026, about 41 months later. Its worst calendar year was 2022, at -11.48%. A retiree who had to sell shares in a year like that would lock in losses. 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).