This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

iShares Launches Muni-Bond ETFs

By Michael Johnston, founder of ETF Database

NEW YORK ( TheStreet) -- 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) and 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.

Municipal bond ETFs have become increasingly popular in recent years. Currently, the ETF screener shows 20 muni bond funds with more than $6 billion in aggregate assets. The new iShares ETFs each charge an expense ratio of 0.30%, making them competitive with existing products.

Year Of The Bond ETF

Considering the huge cash inflows to fixed income ETFs in the last year, the relative paucity of bond ETFs (fewer than 100 funds) is a bit surprising. The expansion of iShares' muni bond platform could be the first of several new product launches this year. Claymore has filed for approval on a similar line of corporate bond funds, including 10 ETFs with specific maturities ranging from 2011 to 2020.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
MUAC $51.18 -0.02%
MUAF $0.00 0.00%
MUAD $0.00 0.00%
MUAE $0.00 0.00%
AAPL $113.29 0.00%

Markets

Chart of I:DJI
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 +1.21 0.06%
NASDAQ 4,828.3250 +15.6170 0.32%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs