New Municipal Bond ETFs from iShares
Friday, January 8th, 2010Michael Johnston submits:
Following a tremendously successful 2009 that saw more than $40 billion flow into fixed income ETFs, the number of bond ETFs is expected to increase significantly in 2010. In what could be the first of many new product launches, iShares introduced a line of new municipal bond, or “muni,” ETFs on Friday. Unlike existing muni bond products that are generally diversified across maturities, the iShares S&P AMT-Free Municipal Series includes six funds with a planned-end date and targeted range of maturities. The new funds include:
- iShares 2012 S&P AMT-Free Municipal Series (MUAA)
- iShares 2013 S&P AMT-Free Municipal Series (MUAB)
- iShares 2014 S&P AMT-Free Municipal Series (MUAC)
- iShares 2015 S&P AMT-Free Municipal Series (MUAD)
- iShares 2016 S&P AMT-Free Municipal Series (MUAE)
- iShares 2017 S&P AMT-Free Municipal Series (MUAF)
Each of the funds in the series is structured as an open-end fund, which holds AMT-free, investment-grade and noncallable municipal bonds until the final months of its operations, when these bonds begin to mature and the portfolio transitions to tax-exempt cash and cash-like instruments. These targeted new products have the potential to be extremely useful in a number of ways, allowing investors and advisors to fill in holes in fixed income portfolios and implement customized strategies.
