SUB Profile
iShares Short-Term National Muni Bond ETF is an exchange-traded fund that primarily invests in short-term municipal bonds issued by U.S. state and local governments. The fund aims to provide investors with a stable income stream while offering tax benefits, as the interest earned on these bonds is exempt from federal income taxes and is not subject to alternative minimum tax. The ETF tracks an underlying index designed to measure the performance of short-term municipal bonds.
Under normal market conditions, the fund allocates at least 80% of its assets to the component securities of the underlying index. Additionally, the ETF invests at least 90% of its assets in fixed income securities that are included in the index or are expected by the advisor to help the fund closely track the index. This investment approach ensures that the fund's holdings align closely with the index's composition, maintaining a high degree of correlation with its benchmark.
The underlying index consists of municipal bonds with short maturities, typically ranging from one to five years. These bonds are selected based on their credit quality and ability to provide tax-exempt interest income. By focusing on short-term securities, the fund aims to minimize interest rate risk while providing investors with regular income. This strategy is particularly appealing to investors seeking a conservative investment with low volatility and tax advantages.
Managed by BlackRock, the iShares Short-Term National Muni Bond ETF benefits from the firm's extensive experience and expertise in managing fixed income investments. BlackRock employs a rigorous selection process to identify high-quality municipal bonds and ensure that the fund's portfolio matches the index's characteristics. The ETF offers investors a convenient way to gain exposure to a diversified portfolio of short-term municipal bonds, combining tax efficiency with a focus on capital preservation and income generation.
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