Today, BlackRock expanded its selection of muni bond ETFs by converting the BlackRock High Yield Municipal Fund into an ETF. The new fund, the iShares High Yield Muni Active ETF (HIMU), is now trading on the CBOE. 

HIMU is an actively managed fund that seeks to generate strong income that is exempt from Federal Income taxes. The fund has a net expense ratio of 0.42%, following a fee waiver. 

“Today’s higher interest rate environment provides a generational opportunity to capture income, particularly in the municipal bond market,” noted 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.”

Municipal bonds make up the wide majority of HIMU’s portfolio, as some investors may expect. This fund may invest in muni bonds of any particular credit rating. Munis chosen for investment by HIMU traditionally will have a maturity of at least five years. 

In terms of credit rating, at least 65% of the fund’s portfolio is slated to sit in bonds that are rated BBB or lower. As such, it remains a possibility that the fund may stay entirely invested in junk bonds. 

Additionally, up to 10% of HIMU’s assets may be allocated to munis deemed to be distressed securities. Traditionally, the fund will opt for these in instances where they offer great potential for returns or exchanges. 

Active Management Advantage

When many investors think of high yield or even distressed munis, they assume the portfolio’s strategy carries a great deal of risk. However, HIMU leverages the strength of BlackRock’s active portfolio team, which can oftentimes provide more on-the-spot flexibility than a passive strategy can. 

HIMU comes online at a moment in which many investors and advisors are taking an interest in municipal bonds. As such, firms and fund managers around the country are implementing new muni bond products to keep up with market demand. 

“ETFs and mutual funds provide diversification benefits for investors accessing the equity and bond markets,” adds Todd Rosenbluth, Head of Research at VettaFi. “Mutual funds had long been the preferred vehicle for municipal bond investors. Indeed, while equity mutual funds continue to bleed assets, municipal bond mutual funds continue to gather net inflows in 2025, according to the Investment Company Institute. However, municipal bond ETFs are gaining ground too.”

See More: Municipal Bonds Favored by Many Advisors

BlackRock currently offers a wide variety of dominant bond strategies within its fund library. For instance, one of the largest BlackRock funds, the iShares Core U.S. Aggregate Bond ETF (AGG), has over $120 billion in assets under management. 

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