iShares Launches First-of-Their-Kind Muni Bond ETFs | ETF Trends

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)

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.