iShares adds to its existing lineup of Target Date S&P Municipal Series. MUAG tracks an investment grade muni bond index comprised exclusively of issues maturing in 2018. Its expense ratio of 0.30% is in line with other iShares target date series ETFs, but higher than other municipal ETFs TFI (0.20%), MUB (0.25%), PRB (0.24%), NYF (0.25%).
Target-date-maturity municipal bond ETFs stretch out another year, with iShares launching a fund (MUAG) holding paper set to expire in 2018. The target-date funds distribute all net assets at maturity. The 2013-2017 funds are: MUAB, MUAC, MUAD, MUAE, MUAF. A 2019 ETF is in the works.
If congressional hearings can be seen as a lagging indicator, investors may be right to be worried about the muni bond market: A House panel is holding a hearing this morning titled "State and Municipal Debt: The Coming Crisis?"
To temper Jamie Dimon's bearishness on muni bonds, a bullish note from DoubleLine Capital's Greg Whitely, who says a blanket dismissal of the muni sector "would be a big mistake." The end of the Build America Bonds program "creates a very favorable supply/demand dynamic in a sector replete with liquid, high-quality and high-yielding bonds."
The Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P AMT-Free Municipal Series 2013 Index. The Fund will mature on a pre-specified date, however the Fund does not seek to return any predetermined amount at maturity. The Fund will invest in AMT-Free, investment grade, noncallable national municipal bond debt.
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