iShares Launches First-of-Their-Kind Muni Bond ETFs

iShares has launched a line of what’s being billed as the first muni bond exchange traded funds (ETFs) that self-liquidate on their specified target date. Target dates range from 2012 to 2017.

iShares has launched the iShares S&P AMT-Free Municipal Series which contain six ETFs that range in maturity from 2012-2017. Each of the funds in the series is structured as an open-end fund holding AMT-free, investment-grade, and non-callable municipal bonds, says Invest With An Edge on Benzinga. [What bond ETFs are hot spots?]

Each fund will mature on a pre-specified date, anticipated to be Aug. 31 of each designated year. A pre-determined amount is not specified for maturity. The funds will have an expense ratio of 0.30%. In the final months of operation, the portfolios will gradually make the switch to tax-exempt cash and other “cash-like instruments.” [What is appealing about muni bonds now?]

Municipal bonds are appealing for several reasons:

• Municipal bonds have a slow-but-steady nature, falling just behind Treasuries on the risk spectrum.
• Defaults have been known to happen, but they’re very rare.
• Municipal bonds are exempt from federal, and in some cases, state taxes. [More on municipal bond ETFs.]

For more stories about municipal bond ETFs, visit our muni-bond category.

• iShares 2012 S&P AMT-Free Municipal Series (NYSEArca: MUAA)
• iShares 2013 S&P AMT-Free Municipal Series (NYSEArca: MUAB)
• iShares 2014 S&P AMT-Free Municipal Series (NYSEArca: MUAC)
• iShares 2015 S&P AMT-Free Municipal Series (NYSEArca: MUAD)
• iShares 2016 S&P AMT-Free Municipal Series (NYSEArca: MUAE)
• iShares 2017 S&P AMT-Free Municipal Series (NYSEArca: MUAF)