Daily ETF Watch: iShares Debuts Muni Funds

Daily ETF Watch: iShares Debuts Muni Funds

iShares adds to iBonds target-date-maturity lineup.

Reviewed by: Heather Bell
Edited by: Heather Bell

Just days after its 2015 fund closed, iShares has rolled out two more target-date-maturity municipal bond ETFs within its iBonds family. The iShares iBonds Dec 2021 AMT-Free Muni Bond ETF (IBMJ) and the iShares iBonds Dec 2022 AMT-Free Muni Bond ETF (IBMK) are both listed on the NYSE Arca.

The funds track S&P indexes of investment-grade municipal bond ETFs that mature during their designated years. IBMJ had more than 5,800 issues in its index as of late August, while IBMK’s index covered more than 4,800 bonds.

Both funds come with an expense ratio of 0.18 percent.

iShares has five other municipal bond ETFs in its iBonds family that cover the years 2016 to 2020. However, they all target bonds maturing between May 31 and Sept. 2 of their designated years. With the two latest launches, it appears iShares is broadening the coverage of the lineup of funds going forward.

ALPS Plans Income Funds

A recent filing from ALPS outlines plans for the addition to its lineup of two more ETFs subadvised by RiverFront Investment Group. The RiverFront Unconstrained Income ETF and the RiverFront Core Income ETF are both slated to join the $471 million RiverFront Strategic Income ETF (RIGS | B-35) on the NYSE Arca exchange.

The unconstrained bond ETF, as its name implies, will operate under very few restrictions with respect to the fixed-income space. It can invest up to 20 percent of its portfolio in mortgage-backed securities and up to 50 percent of its portfolio in securities that are denominated in foreign currencies.

Other than that, the fund can essentially go wherever RiverFront’s analysis points to in the fixed-income space, including allocating all of its assets to high-yield debt; however, the prospectus says the intended duration of the fund will range between two and 10 years.

Meanwhile, the “Core Income” ETF has slightly more stringent requirements. It will invest in a global debt portfolio, up to 40 percent of which can be allocated to high-yield debt.

A quarter of the fund’s assets may be invested in debt securities that are denominated in foreign currencies. It will target a duration of two to eight years “under normal circumstances,” the prospectus said.

The filing did not include tickers or expense ratios.

Contact Heather Bell at [email protected].

Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.