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Muni Bond ETF (NEAR) Hits New 52-Week High

Sanghamitra Saha
Fed Chair Powell remains troubled by uncertainty over trade, global growth and unresolved issues with Brexit and the U.S. debt ceiling.

For investors seeking momentum, iShares Short Maturity Bond ETF (NEAR) is probably on radar now. The fund just hit a 52-week high, which is up roughly 1% from its 52-week low price of $49.80/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 on where it might be headed:

NEAR in Focus

The 402-securities fund is actively managed. It charges 25 bps in fees. The effective duration of the fund is 0.49 years and weighted average maturity is 1.26 years (see all Municipal Bond ETFs here).

Why the Move?

The bond markets are having a great time of late thanks to a dovish Fed and rising U.S.-China trade tensions, which has triggered a flight to safety. Short-term bonds are yielding more than the benchmark 10-year U.S. treasuries. So, investors are probably flocking to this kind of short-duration bonds for higher current income with lesser risks. Also, the limitation on the deductibility of state and local taxes (the SALT deduction) from federal taxes for taxpayers in some states has made investors opt for muni ETF investing this year.

More Gains Ahead?

The fund has a positive weighted alpha of 0.50, which hints at more gains. So, there is definitely still some promise for those who want to ride on this ETF a little longer.

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iShares Short Maturity Bond ETF (NEAR): ETF Research Reports
 
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