iShares, a global leader in Exchange Traded Funds (ETFs), announced today that the first-of-its-kind suite of municipal bond ETFs with a planned end-date began trading on the NYSE Arca. The new iShares Muni Series provides investors many of the features and benefits associated with iShares ETFs with the additional benefit of a planned end-date. Each of the six new funds within the iShares Muni Series holds a basket of AMT-free, investment grade, noncallable, national municipal bonds that mature in a targeted year. When each fund reaches its planned distribution date, it will distribute substantially all of its net assets to then-current investors. There will continually be new funds offered in the series. The new funds, with expense ratios of 0.30%, complement the four existing iShares municipal bond funds, several of which were also industry firsts at the time of their inception.
“The new series provides advisors and investors with an invaluable new set of tools for helping to meet municipal bond needs such as building and maintaining municipal bond ladders.”
The new funds are:
iShares 2012 S&P AMT-Free Municipal Series (NYSE: MUAA)
iShares 2013 S&P AMT-Free Municipal Series (NYSE: MUAB)
iShares 2014 S&P AMT-Free Municipal Series (NYSE: MUAC)
iShares 2015 S&P AMT-Free Municipal Series (NYSE: MUAD)
iShares 2016 S&P AMT-Free Municipal Series (NYSE: MUAE)
iShares 2017 S&P AMT-Free Municipal Series (NYSE: MUAF)
“The iShares Muni Series ETFs represent an innovation for both fixed income investing and ETFs. Investors can now obtain targeted exposure to the municipal yield curve with iShares ETFs that also offer both liquidity and diversification,” said Matt Tucker, Managing Director of US Fixed Income Strategy, BlackRock. “The new series provides advisors and investors with an invaluable new set of tools for helping to meet municipal bond needs such as building and maintaining municipal bond ladders.”
For an investment into one of the iShares municipal series funds, the yield profile is expected to be comparable to that of a portfolio of municipal bonds of similar maturity and credit quality*. Unlike a direct investment in municipal bonds, the breakdown of cash flows between fund monthly distributions and returns at maturity will be variable rather than fixed at the time of investment.
*Assumes purchase at NAV. Does not include transaction costs, fees, taxes, tracking error, the impact of credit events, or the Maturity Transition Period. Actual returns will vary based upon reinvestment rates for the fund and investor as well as market volatility.
About iShares: iShares is the global product leader in exchange traded funds with over 380 funds globally across equities, fixed income and commodities, which trade on 16 exchanges worldwide.1 The iShares Funds are bought and sold like common stocks on securities exchanges. The iShares Funds are attractive to many individual and institutional investors and financial intermediaries because of their relative low cost, tax efficiency and trading flexibility. Investors can purchase and sell shares through any brokerage firm, financial advisor, or online broker, and hold the funds in any type of brokerage account. The iShares customer base consists of the institutional segment of pension plans and fund managers, as well as the retail segment of financial advisors and high net worth individuals.
About BlackRock: BlackRock is a leader in investment management, risk management and advisory services for institutional and retail clients worldwide. With approximately $3.2 trillion under management as of September 30, 2009 (pro forma), BlackRock offers products that span the risk spectrum to meet clients’ needs, including active, enhanced and index strategies across markets and asset classes. Products are offered in a variety of structures including separate accounts, mutual funds, iShares (exchange-traded funds), and other pooled investment vehicles. BlackRock also offers risk management, advisory and enterprise investment system services to a broad base of institutional investors through BlackRock Solutions®. Headquartered in New York City, the firm has over 8,500 employees in 24 countries. For additional information, please visit BlackRock’s website at www.blackrock.com.
Carefully consider the funds’ investment objectives, risk factors and charges and expenses before investing. This and other information can be found in the funds’ prospectuses, which may be obtained by calling 1 800 iShares or by visiting www.iShares.com. Read the prospectus carefully before investing.
Investing involves risk, including possible loss of principal. Diversification may not protect against market risk.
Bonds and bond funds will decrease in value as interest rates rise. A portion of the Fund’s income may be subject to federal or state income taxes or the alternative minimum tax. Capital gains, if any, are subject to capital gains tax.
During the final three months prior to the fund’s planned termination date, its yield will generally tend to move toward prevailing tax-exempt money market rates, and may be lower than the yields of the bonds previously held by the fund and lower than prevailing yields for bonds in the market.
The rate of fund distribution payments may adversely affect the tax characterization of an investor’s returns from an investment in the fund relative to a direct investment in municipal bonds. If the amount an investor receives as liquidation proceeds upon the fund’s termination is higher or lower than the investor’s cost basis, the investor may experience a gain or loss for tax purposes.
Each fund has a number within the name that designates a year when the fund will terminate. Following the fund’s termination date, the fund will distribute substantially all of its net assets to then-current investors. The funds do not seek to return any predetermined amount.
Transactions in shares of the iShares Funds will result in brokerage commissions and will generate tax consequences. iShares Funds are obliged to distribute portfolio gains to shareholders. Shares of the iShares Funds may be sold throughout the day on the exchange through any brokerage account. However, shares may only be redeemed directly from a Fund by Authorized Participants, in very large creation/redemption units.
The iShares Funds (“Funds”) are distributed by SEI Investments Distribution Co. (“SEI”). BlackRock Fund Advisors (“BFA”) serves as the investment advisor to the Funds. BlackRock Execution Services (“BES”) assists in the marketing of the Funds. BFA and BES are affiliates of BlackRock, Inc., none of which is affiliated with SEI.
© 2010 BlackRock Institutional Trust Company, N.A. iShares® is a registered trademark of BlackRock Institutional Trust Company, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners. iS-2062-0110
* Not FDIC Insured * No Bank, State or Federal Guarantee * May Lose Value
1 Source: data from Bloomberg and BlackRock as of 11/30/09
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