ETF Evaluator:
X-Square Municipal Income Tax Free ETF ()
Follow This ETF
(as of Aug 26)
Best Performing in Muni National Interm Over the Last Year
| 7.5% | Simplify National Muni Bond ETF (NMB) |
| 6.9% | X-Square Municipal Income Tax Free ETF (ZTAX) |
| 6.3% | BNY Mellon Municipal Opportunities ETF (BMOP) |
| 6.2% | PIMCO Muncpl Income Oppos Act Ex-Trd (MINO) |
| 6.0% | American Century Divers Muncpl Bd ETF (TAXF) |
Risk
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Risk
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ETF Details
X-Square Municipal Income Tax Free ETF Overview
X-Square Municipal Income Tax Free ETF (ZTAX) is an actively managed Municipal Bond Muni National Interm exchange-traded fund (ETF). Xsquare Capital launched the ETF in 2023.
The investment seeks to provide income exempt from federal income tax.
Under normal market conditions, the fund invests at least 80% of its assets (defined as net assets plus any borrowing for investment purposes, if any) in tax-exempt municipal securities, the income from which is exempt from both federal and state income tax. The adviser expects to invest up to 100% of its assets in tax-exempt municipal securities issued by Puerto Rico, Guam and the U.S. Virgin Islands. Municipal securities may be of any maturity, duration or credit rating including those rated below investment grade (commonly known as “junk bonds”). The fund is non-diversified.
About X-Square Municipal Income Tax Free ETF (ZTAX)
There are 2 members of the management team with an average tenure of 3.21 years: Ignacio Canto (2023) and Gabriel Medina (2023). Management tenure is more important for actively managed ETFs than passive index ETFs.
The ETF has 1 primary benchmark: Bloomberg Muni Bd: HY (NI Grade) TR USD index with a weighting of 100%. X-Square Municipal Income Tax Free ETF has 18 securities in its portfolio. The top 10 holdings constitute 86.9% of the ETF’s assets. The ETF meets the SEC requirement of being classified as a nondiversified fund. The ETF is not considered to have an ESG focus with its investment selection and management.
X-Square Municipal Income Tax Free ETF is part of the Fixed Income global asset class and is within the Municipal Bond ETF group. X-Square Municipal Income Tax Free ETF has 99.7% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 0.0% There is 0.0% allocated to foreign stock, and 0.0% is allocated to preferred stocks. The bond allocation as a percentage of total assets is 99.7% (0.0% domestic bond, 99.7% foreign bond and 0.0% convertible bond). X-Square Municipal Income Tax Free ETF has 0.3% of the portfolio in cash.
Assets Under Management
The fund has $5 million in total assets, which is below the $2 billion average for the Muni National Interm category. Normally, lower assets under management translates to higher average expense ratios, and greater total assets are desired. However, for some investment categories, such as small-cap investing, it may be difficult for the manager to fully employ the desired active strategy if assets grow too large or too quickly.
ZTAX Performance and Fees
The expense ratio measures how much of a fund’s assets are used for administrative expenses and operating expenses, including adviser fees and fees for the transfer agent and custodial services. The X-Square Municipal Income Tax Free ETF expense ratio is high compared to funds in the Muni National Interm category. X-Square Municipal Income Tax Free ETF has an expense ratio of 0.92%, which is 225% higher than its category average, making the fund expense ratio grade a F. While it is difficult to predict returns, it is known that high annual expense ratios reduce your rate of return, and excessive fees are difficult to overcome. Active management normally comes with higher expense ratios than passive index management. Certain investment categories such as small company and foreign also normally have higher expense ratios. It is best to compare fund expense ratios against the category averages for meaningful assessments.
High portfolio turnover can translate to higher expenses and lower aftertax returns. X-Square Municipal Income Tax Free ETF has a portfolio turnover rate of 0%, which indicates that it holds its assets around / 1.2 years. By way of comparison, the average portfolio turnover is 41% for the Muni National Interm category.
Recently, in the month of July 2026, X-Square Municipal Income Tax Free ETF returned -1.9%, which earned it a grade of F, as the Muni National Interm category had an average return of -1.6%. The letter grades of A, B, C, D and F are based upon relative rankings within the investment category. A grade of A, for example, would indicate that the return is in the highest 20% for that time period compared to all ETFs in that category.
X-Square Municipal Income Tax Free ETF has a trailing yield of 4.72%, which is above the 3.53% category average.
The fund normally distributes its income quarterly and its capital gains annually.
It’s natural to seek the best-performing investments, but you must consider the relationship between risk and return and the impact of costs and taxes on your realized returns.
X-Square Municipal Income Tax Free ETF Grades
Year to date, the ETF has returned 1.7%, 1.3 percentage points better than the category, which translates into a grade of A. The fund has returned 6.9% over the past year (grade of A) and 4.5% over the past three years (grade of A).
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ZTAX Trailing NAV Total Returns Data as of 7/31/26
| Last Month |
Last Quarter |
Ann'l. 1Yr |
Ann'l. 3Yr |
Ann'l. 5Yr |
Ann'l. 10Yr |
|
| ZTAX Return (NAV) | -1.9% | 0.3% | 6.9% | 4.5% | na | na |
| ZTAX Return (Price) | -0.4% | 1.1% | 7.2% | 5.0% | na | na |
| NAV +/- Price Return | -1.458% | -0.875% | -0.247% | -0.512% | na | na |
| Muni National Interm Avg | -1.6% | -0.5% | 4.9% | 3.3% | 0.6% | 1.9% |
| ZTAX Grade (NAV) | F | A | A | A | na | na |
| +/- Category (NAV) | -0.3% | 0.7% | 2.0% | 1.2% | na | na |
| ZTAX Tax-Cost Ratio | na | na | 0.0% | 0.0% | na | na |
ZTAX Annual NAV Total ReturnsData as of 7/31/26
| 2026 | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |
| ZTAX Return (NAV) | 1.7% | 3.6% | 2.8% | na | na | na | na | na | na | na | na |
| ZTAX Return (Price) | 5.7% | 0.4% | 4.7% | na | na | na | na | na | na | na | na |
| NAV +/- Price Ret | 2.332% | -0.898% | 0.652% | na | na | na | na | na | na | na | na |
| Muni National Interm Avg | 0.4% | 4.7% | 2.0% | 6.1% | -8.1% | 1.6% | 5.0% | 7.7% | 1.2% | 5.2% | 0.1% |
| ZTAX Grade (NAV) | A | F | A | na | na | na | na | na | na | na | na |
| +/- Category | 1.3% | -1.1% | 0.9% | na | na | na | na | na | na | na | na |
| Risk Measures | |
| Beta: | 0.93 |
| R-Squared: | 84% |
| Standard Deviation: | 5.8% |
| Category Risk Index: | 1.17 |
| Category Risk Rating: | High |
| Total Risk Index: | 0.48 |
| Total Risk Rating: | Low |
| Portfolio Characteristics | |
| Yield: | 4.7% |
| Total Assets: | $ 5 Mil |
| Share Class Assets: | $ 5 Mil |
| Turnover: | 0.8% |
| Expense Ratio: | 0.92% |
| Index Fund: | No |
| Index Tracked: | Bloomberg Muni Bd: HY (NI Grade) TR USD |
| Index Weighting: | 100% |
| Leveraged: | No |
| Socially Responsible Fund: | No |
| Capital Gains Distribution Frequency: | Annually |
| Income Distribution Frequency: | Quarterly |
Management Team
| Number of Managers: 2 | |||
| Longest Tenure: 3.2 years | |||
| Average Tenure: 3.2 years | |||
| Managers (Year): Canto Ignacio (2023), Medina Gabriel (2023) | |||
Portfolio Composition (as of 7/31/26)
| # of Holdings: | 18 |
| % in Top 10 Holdings: | 86.9% |
| Fund is Non-Diversified: | Yes |
| % in Foreign Issues: | 99.7% |
Portfolio Allocation |
|
| Domestic Stock: | 0.0% |
| Foreign Stock: | 0.0% |
| Preferred Stock: | 0.0% |
| Domestic Bond: | 0.0% |
| Foreign Bond: | 99.7% |
| Convertible Bond: | 0.0% |
| Other: | 0.0% |
| Cash: | 0.3% |
Purchase Information
| Legal Structure: | Open Ended Investment Company |
| Fund Family: | Xsquare Capital |
| Phone Number: | 844-314-9951 |
| Website: | |
| Inception Date: | May 18, 2023 |
Expenses and Fees
| Expense Ratio (%): | 0.92% (Rating: High) |
| Category Average Expense Ratio (%): | 0.28% |
