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BlackRock Bolsters Municipal Bond Suite with Launch of High Yield Muni ETF

1. BlackRock converted its High Yield Municipal Fund into the iShares HIMU ETF. 2. The ETF aims to maximize tax-exempt income in a high-rate environment. 3. BlackRock projects a surge in active ETF assets to $4 trillion by 2030. 4. HIMU maintains its predecessor's investment objectives for diversified high-yield securities. 5. The Municipal Bond Group manages over $182 billion, enhancing ETF credibility.

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FAQ

Why Bullish?

The launch of HIMU and its expected success can drive investor confidence. Historical ETF launches have created significant interest and potential capital inflow.

How important is it?

The conversion of a fund to an ETF is significant for BlackRock's market positioning. Such transactions typically enhance their competitive edge in the evolving investment landscape.

Why Long Term?

Developing a strong asset base in HIMU may contribute to long-term growth for BlackRock. Similar past ETF launches have generally shown sustained performance gains over time.

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HIMU
NEW YORK--(BUSINESS WIRE)--Today, BlackRock announced the conversion of the BlackRock High Yield Municipal Fund into an active ETF, creating the iShares® High Yield Muni Active ETF (CBOE: HIMU). HIMU harnesses the expertise of BlackRock’s Municipal Bond Group to provide more choice and flexibility to clients seeking high yield, tax-exempt solutions in the convenience of an ETF. “Today’s higher interest rate environment provides a generational opportunity to capture income, particularly in the municipal bond market,” said Pat Haskell, Head of the Municipal Bond Group at BlackRock. “Through the ETF wrapper, HIMU aims to take advantage of the attractive yield levels and strong credit quality in municipal bonds, delivering alpha to our clients in an efficient and transparent manner.” The new ETF seeks to maintain identical investment objectives and fundamental investment policies as its predecessor mutual fund. HIMU aims to maximize federal tax-exempt current income and capital appreciation by investing in high yield municipal securities across a variety of sectors. The mutual fund was launched in 2006 and delivered top quartile performance over the one-, five-, ten- and fifteen-year periods as of December 31, 2024.1 HIMU leverages the scale of BlackRock’s Municipal Bond Group, which manages over $182 billion in assets across a wide range of diversified strategies, including regions, states, local governments, sectors, sub-sectors and issuers.2 iShares® High Yield Muni Active ETF Ticker HIMU Performance Benchmark A customized weighted index comprised of 20% Bloomberg Municipal Bond Rated Baa Index/60% Bloomberg Municipal Bond: High Yield (non-Investment Grade) Total Return Index/20% Bloomberg Municipal Investment Grade ex BBB (the “High Yield Customized Reference Benchmark”) Portfolio Managers Pat Haskell, Kevin Maloney, Ryan McDonald, Phillip Soccio​, Walter O’Connor Furthers BlackRock’s Commitment to Active ETFs “The growth of active ETFs is driving innovation and unlocking new opportunities for investors globally,” said Jorge del Valle Papic, Americas Head of Active Investments within Global Product Solutions at BlackRock. “This conversion underscores the strength of our product platform and our dedication to offering access to BlackRock’s premier active management capabilities through an investment vehicle that aligns with our clients’ evolving needs.” BlackRock projects that global active ETF assets under management will surge to $4 trillion by 2030, a more than four-fold increase from $900 billion through June 2024.3 BlackRock manages $37 billion in assets across 50 active ETFs in the U.S.4 About BlackRock BlackRock’s purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a leading provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable. For additional information on BlackRock, please visit www.blackrock.com/corporate | Twitter: @blackrock | LinkedIn: www.linkedin.com/company/blackrock About iShares iShares unlocks opportunity across markets to meet the evolving needs of investors. With more than twenty years of experience, a global line-up of 1500+ exchange traded funds (ETFs) and $4.2 trillion in assets under management as of December 31, 2024, iShares continues to drive progress for the financial industry. iShares funds are powered by the expert portfolio and risk management of BlackRock. 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 or, if available, the summary prospectuses which may be obtained by visiting www.iShares.com or www.blackrock.com. Read the prospectus carefully before investing. Investing involves risks, including possible loss of principal. Prior to close of business on 02/07/2025, the Fund operated as an open-end mutual fund. The Fund has an identical investment objective and substantially similar investment strategies and investment risk profiles as the predecessor mutual fund. Performance for the periods prior to 02/10/2025 discussed above is based upon the results of the predecessor mutual fund, the BlackRock High Yield Municipal Fund. Please refer to the current prospectus for further information. Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in the value of debt securities. Credit risk refers to the possibility that the debt issuer will not be able to make principal and interest payments. There may be less information on the financial condition of municipal issuers than for public corporations. The market for municipal bonds may be less liquid than for taxable bonds. Some investors may be subject to federal or state income taxes or the Alternative Minimum Tax (AMT). Capital gains distributions, if any, are taxable. Municipal securities risks include the ability of the issuer to repay the obligation, the relative lack of information about certain issuers of municipal securities, and the possibility of future legislative changes which could affect the market for and value of municipal securities. Budgetary constraints of local, state, and federal governments upon which the issuers may be relying for funding may also impact municipal securities. Non-investment-grade debt securities (high-yield/junk bonds) may be subject to greater market fluctuations, risk of default or loss of income and principal than higher-rated securities. Funds that concentrate investments in specific industries, sectors, markets or asset classes may underperform or be more volatile than other industries, sectors, markets or asset classes and than the general securities market. Transactions in shares of ETFs may result in brokerage commissions and will generate tax consequences. All regulated investment companies are obliged to distribute portfolio gains to shareholders. Diversification and asset allocation may not protect against market risk or loss of principal. Actively managed funds do not seek to replicate the performance of a specified index, may have higher portfolio turnover, and may charge higher fees than index funds due to increased trading and research expenses. There can be no assurance that an active trading market for shares of an ETF will develop or be maintained. Prepared by BlackRock Investments, LLC, member FINRA. ©2025 BlackRock, Inc. or its affiliates. All Rights Reserved. BLACKROCK and iSHARES are trademark of BlackRock, Inc. or its affiliates. All other trademarks are those of their respective owners. _______________________________ 1 Past performance does not guarantee future results; BlackRock, as of 12/31/2024; Morningstar, as of 1/30/2025. The Morningstar peer group is the High Yield Muni fund category comprised of 193 funds for the 1-year period, 175 funds for the 5-year period, 119 funds for the 10-year period, and 80 funds for the 15-year period. The Morningstar category average is designed to represent the average return of funds within a category for a period. 2 BlackRock, as of 12/31/2024. 3 BlackRock, as of March 31, 2024. Estimates are for global figures and include 2027 and 2030 scenario calculations based on proprietary research by BlackRock Global Product Solutions. Subject to change. The figures are for illustrative purposes only and there is no guarantee the projections will come to pass. 4 BlackRock, as of 1/28/2025.

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