“More importantly though, municipal bonds’ income proposition remains very compelling. Long-term muni yields are attractive relative to Treasuries before tax, and especially after tax. At January 30, we had a 30-year muni yield of 2.50% vs. 2.22% on a 30-year Treasury. Pretty good. But factor in munis’ tax exemption, and that’s a 4.42% taxable equivalent yield on a 30-year municipal bond,” said Hayes in a note out last month. [Muni Bonds: What Comes After Perfect]
Thirteen states are represented in MEAR with New Jersey and New York combining for over 15% of the new ETF’s weight.
MEAR is the second new fixed income launched by BlackRock in the past two weeks. In late February, the issuer introduced the iShares U.S. Fixed Income Balanced Risk ETF (BATS: INC), a smart beta spin on bond ETFs.
Also actively managed, INC seeks to balance interest rate risk and credit risk, the two primary drivers of bond returns. [A Smart Beta Bond ETF]
ETF Trends editorial team contributed to this article.