BlackRock expands iBonds target-maturity suite with 2025 muni-bond ETF

Nov 15th, 2018 | By | Category: Fixed Income

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BlackRock has launched the iShares iBonds Dec 2025 Term Muni Bond ETF (IBMN US) on Cboe BZX Exchange.

BlackRock expands iBonds target-maturity suite with 2025 muni-bond ETF

BlackRock offers seven target-maturity municipal bond ETFs with dates ranging between 2019 and 2025.

The fund is the latest addition to the firm’s range of target-maturity fixed income ETFs which invest in bonds from municipal issuers.

Unlike the majority of fixed income ETFs, which trade in and out of bonds to maintain a target duration exposure, target-maturity ETFs hold underlying bonds until maturity, at which point they liquidate.

By combining funds of varying maturities, investors can build a portfolio that meets their specific future cash requirements.

Investors benefit from the enhanced diversification of a portfolio of several bonds, thereby mitigating a portfolio’s exposure to idiosyncratic risk – such as the risk of downgrade or default – of a single bond.

The ETF tracks the S&P AMT-Free Municipal Series Dec 2025 Index which is composed of around 5,000 investment-grade US municipal bonds maturing between 1 January 2025 and 2 December 2025.

It comes with an expense ratio of 0.18%.

BlackRock currently offers 22 target-maturity funds across corporate and municipal exposures. The municipal bond fund collectively house over $1.2bn in assets with target dates between 2019 and 2025.

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