Barclays Global Investors (BGI) announced that the iShares S&P California Municipal Bond Fund (AMEX: CMF) and the iShares S&P New York Municipal Bond Fund (AMEX: NYF) will begin trading today on the American Stock Exchange. They are the first state municipal bond ETFs available to U.S. investors and they follow the launch last month of the first U.S. municipal bond fund, the iShares S&P National Municipal Bond Fund (AMEX: MUB), which has already attracted approximately $330 million in assets under management and 43,000 in average daily trading volume shares since inception(1). The state municipal iShares funds are designed to track liquid, institutional quality municipal bond indices and each has an annual expense ratio of 0.25%.
"We're pleased to offer investors the first suite of municipal bond ETFs. The positive response to the iShares S&P National Municipal Bond Fund demonstrates that investors value iShares' low cost and tax efficiency, ease of trading and liquidity," said Noel Archard, Head of U.S. iShares Product Development. "The potential benefits of iShares become more evident in markets that are traditionally illiquid and expensive."
The S&P California Municipal Bond Index is a subset of the S&P National Municipal Bond Index and is comprised of municipal bonds from issuers in the State of California that are California state or local governments or agencies whose interest payments are exempt from U.S. federal and California state income taxes and the federal alternative minimum tax ("AMT"). The S&P New York Municipal Bond Index is also a subset of the S&P National Municipal Bond Index and is comprised of municipal bonds from issuers in the State of New York that are New York state or local governments or agencies whose interest payments are exempt from U.S. federal and New York State income taxes and the federal alternative minimum tax ("AMT").
Each bond in the indices must have a rating of at least BBB- by Standard & Poor's, Baa3 by Moody's® Investors Service, Inc., or BBB- by Fitch Inc. Each bond included in the indices must have a minimum par amount outstanding of US$50 million. The indices are market value weighted and the securities in the indices are updated after the market close on the last business day of each month.
The iShares Funds are index funds that 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.
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.
Barclays Global Investors (BGI) is one of the world's largest asset managers(2) providing structured investment strategies such as risk-controlled active strategies and indexing. In the U.S., BGI is one of the largest active managers(3), set apart by its risk-controlled approach. BGI manages 65% of the world's 100 largest pension plans(4) and is a leader in assets and products in exchange traded funds (ETFs) through its iShares® brand with more than 190 ETFs globally. The firm managed over $2 trillion in assets as of 6/30/07, for more than 2,900 clients in 52 countries around the world. BGI is a majority-owned subsidiary of Barclays Bank PLC.
There are risks involved with investing, including possible loss of principal. Bonds and bond funds will decrease in value as interest rates rise. There is no guarantee that the Fund's income will be exempt from federal or state income taxes. Federal or state changes in income or alternative minimum tax rates or in the tax treatment of municipal bonds may make them less attractive as investments and cause them to lose value. Capital gains, if any, are subject to capital gains tax.
The iShares Funds ("Funds") are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an advisor to the Funds. Barclays Global Investors Services (BGIS) assists in the marketing of the Funds. BGFA and BGIS are subsidiaries of Barclays Global Investors, N.A., which is a majority owned subsidiary of Barclays Bank PLC, none of which is affiliated with SEI.
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by Standard and Poor's ("S&P"). S&P does not make any representation regarding the advisability of investing in the Funds. Neither SEI nor BGI, nor any of their affiliates, are affiliated with S&P.
© 2007 Barclays Global Investors. All rights reserved. iShares® is a registered trademark of Barclays Global Investors, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.
(1) Source: Bloomberg.
(2) Source: "P&I/Watson Wyatt World 500," Pensions & Investments, September 4, 2006.
(3) Source: "Special Reports: Money Manager Directory," Pensions & Investments, May 29, 2006.
(4) Source: "P&I/Watson Wyatt World 300: Largest Pension Funds," Pensions & Investments, September 18, 2006.