iShares Short-Term National Muni Bond ETF

SUB

Market cap $11B

If your priority is federal tax efficiency, the iShares Short-Term National Muni Bond ETF (NYSEARCA: SUB) is worth considering.

At the very top of the list for anyone looking to retire right now without subjecting themselves to significant market swings, ETFs have become incredibly popular.

Financial instruments are created to address specific market needs or opportunities, and understanding their design helps in selecting the right one for your goals. Municipal bonds offer tax advantages, making them attractive to high-income taxpayers, but they come with credit risk and typically lower yields compared to other bonds. The iShares Short-Term National Muni Bond ETF provides safety with low expense ratios but offers lower yields, making it less attractive for those in lower tax brackets.

The Internal Revenue Service has announced new tax brackets for 2025. This makes now an ideal time to revisit the benefits of muni bond ETFs.

Investors continue to turn to low-cost core taxable bond ETFs in 2024. The Vanguard Total Bond Market ETF (BND) and the iShares Core Aggregate Bond ETF (AGG) gathered $2.5 billion and $2.1 billion, respectively, as of late February.