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BGI launches first US-listed municipal bond exchange traded fund


Barclays Global Investors’ iShares S&P National Municipal Bond Fund (AMEX: MUB) has begun trading on the American Stock Exchange.

Barclays Global Investors’ iShares S&P National Municipal Bond Fund (AMEX: MUB) has begun trading on the American Stock Exchange. It is the first municipal bond ETF available to US investors. The fund is designed to track a liquid, institutional quality municipal bond index and its annual expense ratio is 0.25%.

“Investors have been looking for a simple and cost-effective method of gaining exposure to the municipal market, which is traditionally a less liquid and expensive marketplace especially for those building a portfolio of individual issues,” says Noel Archard, Head of U.S. iShares Product Development. “The iShares S&P National Municipal Bond Fund looks to solve those problems. BGI applied its quantitative investment management expertise to deliver what it believes is a quality municipal ETF accessible to investors.”

MUB aims to track the municipal bond sector of the United States as defined by the S&P National Municipal Bond Index. The Index includes municipal bonds from issuers that are primarily state or local governments or agencies (including the Commonwealth of Puerto Rico and U.S. territories such as the U.S. Virgin Islands and Guam) such that the interest on the bond is exempt from U.S. federal income taxes and the federal alternative minimum tax as determined by the Index Provider in accordance with its methodology. Each bond must be denominated in U.S. dollars, have a rating of at least BBB-  and have a minimum par amount outstanding of USD 50 million.

“The Amex is proud to be partnering with Barclays to launch the first ETF to track the U.S. municipal bond sector,” says Scott Ebner, Senior Vice President, Amex ETF Marketplace. “This new iShares product accommodates a growing demand from investors who are seeking exposure to a wider array of fixed income ETF offerings.”

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