BlackRock Expands Suite of Target Maturity ETFs with Launch of iShares® iBonds® Dec 2021 AMT-Free Muni Bond ETF and iShares iBonds Dec 2022 AMT-Free Muni Bond ETF…
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BlackRock, Inc. (NYSE: BLK) has expanded its suite of target maturity ETFs with the launch of the iShares iBonds Dec 2021 AMT-Free Muni Bond ETF and iShares iBonds Dec 2022 AMT-Free Muni Bond ETF. The new funds join the iBonds 2014-2020 AMT-Free Muni Bond ETF series, which launched in 2010 and was the ETF industry’s first series of bond ETFs with planned end-dates.
iBonds are term maturity ETFs that are designed to provide monthly income distributions and a principal repayment at expiration. iBonds can be used in many of the same portfolio applications as individual bonds. The ETF structure provides the added benefits of diversification, professional management, exchange traded flexibility and price transparency.
iBonds Dec 2021 AMT-Free Muni Bond ETF and iBonds Dec 2022 AMT-Free Muni Bond ETF hold a basket of AMT-free, investment grade, non-callable, national municipal bonds that mature in 2021 and 2022, respectively. When the funds reaches their respective planned termination dates, they will distribute substantially all of their net assets, after deduction of any liabilities, to then-current investors.
For an investment into one of the iBonds AMT-Free Muni Bond ETFs, investors can observe the approximate average yield to maturity of the underlying bond portfolio at the time of purchase. Due to the fact that iBonds are open-ended funds, there will be some volatility around monthly income and the final distribution, but the realized yield should be comparable to that of a portfolio of municipal bonds of similar maturity and credit quality.
“The unique combination of a defined maturity with the exchange liquidity and diversification of an ETF can make iBonds ideal tools to enhance new and existing fixed income portfolios,” commented Matthew Tucker, Head of iShares Fixed Income Strategy.” BlackRock’s iBonds product suite has grown 27% year to date, reaching nearly $1.38B. The series continues to provide clients with the opportunity to build more diversified bond ladders, which can be appealing to investors seeking income and protection against higher interest rates.”
As of July 31 2014, iSharesBonds® Corporate ETFs and iShares Muni Term Maturity ETFs were joined under a single brand, the iBonds Term Maturity ETF suite. The iBonds suite now includes fourteen Corporate, four Corporate Ex Financials, and seven Muni term maturity ETFs. Fees for iBonds AMT-Free Muni Bond ETFs were recently reduced to 0.18% from 0.30%.
Source: ETFWorld.com
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