PWZ delivers a 3.6% tax-free yield, matching a 7% taxable return for top-bracket California residents amid rising distributions.
The Invesco California AMT-Free Municipal Bond ETF (PWZ) offers a 3.6% tax-free yield, equivalent to over 7% for California residents in the highest federal and state tax brackets. The $24 ETF outpaces the after-tax return on 5% Treasuries, attracting investor interest.
Osaic Holdings increased its PWZ stake by 383% in Q2 as monthly distributions rose, driven by reinvestments in higher-coupon bonds. The fund has paid uninterrupted monthly distributions since November 2007, though call risk remains a concern if the Fed cuts rates.
PWZ excludes private-activity bonds subject to the Alternative Minimum Tax, focusing on general obligation and essential-service revenue bonds. The strategy aims to provide stable, tax-exempt income for high earners in California.