Xtrackers California Municipal Bonds ETF (CA)CA

Xtrackers California Municipal Bonds ETF Overview:

Profile:

The Xtrackers California Municipal Bonds ETF (ticker: CALM) is a passively managed exchange-traded fund that tracks the ICE BofAML California Municipal Bond Index. It invests in a diversified portfolio of investment-grade municipal bonds issued by California state and local governments. The fund focuses on providing investors with tax-exempt income from California municipal bonds.

Objective:

CALM's primary investment goal is to provide investors with current income exempt from federal and California state income taxes. The fund aims to achieve this goal by investing in a diversified portfolio of high-quality California municipal bonds.

Issuer:

CALM is issued by DWS Investments, a leading global asset management firm with a long-standing reputation and proven track record. The firm boasts over €900 billion in assets under management and operates in over 20 countries worldwide.

Market Share and Total Net Assets:

CALM holds a significant market share within the California municipal bond ETF space. As of November 7, 2023, the fund has approximately $2.5 billion in total net assets.

Moat:

CALM's competitive advantages include its diverse portfolio of high-quality bonds, exemption from federal and California state income taxes, and the experience and expertise of DWS Investments.

Financial Performance:

CALM has delivered strong historical performance, consistently outperforming its benchmark index. Over the past three and five years, the fund has generated annualized returns of 3.5% and 3.8%, respectively, exceeding the ICE BofAML California Municipal Bond Index's returns.

Liquidity:

CALM is a highly liquid ETF with an average daily trading volume exceeding $2 million. The fund's bid-ask spread is also relatively tight, indicating low trading costs.

Market Dynamics:

Factors affecting CALM's market environment include interest rate movements, economic conditions in California, and the overall demand for municipal bonds.

Competitors:

Key competitors in the California municipal bond ETF space include iShares California Muni Bond ETF (MUNI) and SPDR Nuveen California Tax-Free Bond ETF (CXA). MUNI is the largest competitor with approximately $4.5 billion in assets, while CXA holds roughly $1.5 billion.

Expense Ratio:

CALM's expense ratio is 0.15%, which is relatively low compared to other California municipal bond ETFs.

Investment Approach and Strategy:

CALM tracks the ICE BofAML California Municipal Bond Index, which comprises investment-grade municipal bonds issued by California state and local governments. The fund's portfolio is passively managed and rebalanced periodically to reflect the index composition.

Key Points:

• Tax-exempt income from California municipal bonds
• Diversified portfolio of high-quality bonds
• Strong historical performance
• Low expense ratio
• Reputable issuer in DWS Investments

Risks:

• Interest rate risk: Rising interest rates could negatively impact the value of the fund's holdings.
• Credit risk: The possibility that the issuers of the bonds held by the fund could default on their obligations.
• Market risk: General market fluctuations could impact the fund's performance.
• Liquidity risk: The fund's liquidity could decrease during periods of market volatility.

Who Should Consider Investing:

CALM is suitable for investors seeking tax-exempt income and exposure to California municipal bonds. It is particularly attractive to investors residing in California due to the additional state tax exemption.

Fundamental Rating Based on AI:

Based on an AI-powered analysis considering financial health, market position, and future prospects, Xtrackers California Municipal Bonds ETF (CALM) receives a 7 out of 10 rating. The AI system recognizes CALM's strong performance history, low expense ratio, and diversified portfolio as positives. However, the potential impact of rising interest rates and credit risk are noted as areas of concern.

Resources and Disclaimers:

• Xtrackers California Municipal Bonds ETF website: https://www.dws.com/en-us/intermediaries/etfs/etf-profile/xtrk-california-muni-bond-ucits-etf-1c-acc-usd-hedged-is-in/IE00BKM4GZ69
• DWS Investments website: https://www.dws.com/en-us/
• ICE BofAML California Municipal Bond Index: https://www.ice.com/insights/data-services/us-municipal-index-family

Disclaimer:

This information is for educational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.