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iShares National Muni Bond ETF (MUB) Hits New 52-Week High
For investors seeking momentum, iShares National Muni Bond ETF (MUB - Free Report) is probably on their radar now. The fund just hit a 52-week high and is up roughly 5.1% from its 52-week low price of 107.85/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea ofwhere it might be headed.
MUB in Focus
MUB provides exposure to the investment-grade segment of the U.S. municipal bond market. The product has 3,099 bonds in its portfolio. The fund has 5.47 years of weighted average duration entailing moderate interest rate risk. The product charges investors 25 basis points in fees (see: all Municipal Bond ETFs here).
Why the Move?
Municipal bonds are great picks for investors seeking a steady stream of tax-free income. Usually the interest income from munis is exempted from federal tax and sometimes even state taxes, making these especially attractive to investors in the high tax bracket looking to reduce their tax liability.
So, investors concerned about taxes might have picked this ETF. An ultra-low interest rate environment has been boosting the demand for munis for some time now. Additionally, with the Federal Reserve delaying its interest rate hike, municipal bond ETFs are expected to maintain their momentum. All these explain the latest ascent in the iShares National Muni Bond ETF.
More Gains Ahead?
Currently, we have MUB as a Zacks ETF Rank #3 (Hold) so it is hard to get a handle on its future returns one way or another. The fund has a positive weighted alpha of 4.70. A positive weighted alpha hints at more gains.
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