This is a passive, defined-maturity ETF that holds a basket of US investment-grade municipal bonds maturing in the target year. As the target date approaches, the underlying bonds are redeemed in sequence. At final maturity the fund is liquidated and returns principal to investors. The interest is exempt from federal income tax.

It suits investors who want federal tax savings and a predictable maturity and cash flow from municipal bonds, matched to a funding need at a specific point in time.

It is a passive (index-tracking) ETF managed by iShares.

The fund holds a basket of US investment-grade municipal bonds that are redeemed in the target maturity year, and the holdings are redeemed in sequence as maturity approaches. At maturity the fund is liquidated and the remaining principal is returned to investors. This structure provides federally tax-exempt interest income along with cash flows similar to those of a ladder built directly from individual municipal bonds.

• Defined target-maturity municipal bond structure
• Federal tax exemption and a predictable maturity

Assets under management (AUM) stand at $526.6M, and the annual expense ratio (Expense Ratio) is 0.10%.

Compared with MUB and VTEB, which are perpetually managed national municipal bond ETFs, the main points of comparison are maturity structure and cash flow predictability.

Municipal bond ETFs depend on the direction of interest rates, and defined-maturity funds become progressively less sensitive to rate changes as maturity nears. If held to maturity, the fund tends to approach its expected cash flows regardless of interim price swings.

Inflows into defined-maturity municipal bond ETFs are driven by funding-plan needs and tax-saving demand at specific points in time, and are supplemented by demand for building municipal bond ladders or accumulating funds for a target date. Investors should also keep in mind that prices before maturity move with the interest rate environment.

Federal tax savings and a predictable maturity are its strengths, while liquidation at maturity, the need to reinvest, and interest rate risk before maturity are considerations.

If you want a different target maturity, adjacent-year products such as IBMQ and IBMS are good choices for building a municipal bond ladder. If you want steady municipal bond exposure without a defined maturity, short-term municipal products such as SUB are also worth comparing. The three products shown in the table, MUB, VTEB, and JMUB, are perpetually managed funds that broadly track national municipal bonds without a maturity structure, which is where they differ from this fund. This ETF is differentiated by its defined target-maturity municipal bond structure.

Here are the points to review before investing in IBMR. Tax savings and maturity predictability are attractive, but liquidation at maturity, interest rate risk before maturity, and the tax rules of your state of residence should be confirmed in advance. It is also wise to compare it with perpetual municipal bond products and adjacent-maturity products.

Interest rate changes before maturity and the state tax burden in your state of residence are the main variables for short-term performance. Because the fund is liquidated at the target maturity, you will need a plan for reinvesting the proceeds afterward. Selling before maturity can result in gains or losses that differ from the expected cash flows.

It is a suitable candidate for investors who want federal tax savings along with municipal bond exposure matched to a funding need at a specific point in time. If you want perpetual municipal bond exposure, consider products like MUB and VTEB, and if you want a predictable maturity structure, consider this product. Comparing the two types before choosing is advisable.