BlackRock Debuts Short Maturity Muni ETF

(RTTNews) - BlackRock (BLK) said its iShares division has launched the iShares Short Maturity Municipal Bond ETF (MEAR).

The move by iShares, the world's largest manager of exchange traded funds, is part of efforts to boost its lineup of fixed income ETFs.

iShares Short Maturity Municipal Bond ETF is actively managed by BlackRock's municipal bond team and backed by a municipal credit research team.

An active approach allows to capitalize on municipal opportunities along the front of the yield curve and across the investment grade credit spectrum, BlackRock said.

MEAR seeks to maximize tax-free income through diversified exposure to short-term municipal bonds by investing in tax-exempt municipal bonds with maturities of less than five years. Under normal circumstances the portfolio will have an effective duration of 1.2 years or less.

The launch of MEAR extends iShares suite of short duration and municipal bond ETFs to provide investors with a wide range of investment choices.

Currently, about 59.6 percent of MEAR's portfolio is allocated in cash and derivatives. In terms of credit quality, 27.2 percent of the new ETF's holdings are rated AA with another 11.5 percent rated A.

MEAR debuts at a time of robust inflows to municipal bond ETFs. According to Bloomberg, investors added about $1 billion to ETFs that purchase state and local bonds, the fastest annual start since the funds started in 2007.