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Now if we think about a lot of the solutions investors have built with muni bonds traditionally, bond laddering is one of the most common applications. And the idea is very simple. You can imagine an investor has a short-term investment horizon, they want to invest in a portfolio of muni bonds, maybe they're going to buy five muni bonds that mature one, two, three, four, and five years in the future. The idea of the investment is to go and buy these five securities and to hold them until maturity. And so a year after their investment that one-year bond has matured. They then take the proceeds and reinvest it in a new five-year bond.

And, of course, if they needed that money for some other application, they now have a bond which has matured, and they have the option of being able to take that money and invest it elsewhere. So the latter keeps them exposed to the market, but also provides regular opportunities to make withdrawals out of their investment if they want. Now, one of the things we've seen a growing interest in is a series of funds we call the muni series. And these are a set of iShares that each have a predefined liquidation date. And so each of these funds is set up to actually invest in a set of securities, a set of individual muni bonds that all have a similar maturity.

So, for example, we have an iShares muni series 2012 fund. All the bonds in that fund mature between June and August 2012.

And so what's going to happen for an investor who buys into that fund, the fund is going to pay out a monthly distribution of income, that income is coming off the bonds inside the fund, and as we get to 2012, the actual bonds in the fund will mature. And once all the bonds have matured, the fund will actually pay out the proceeds from all those maturities out to investors. And so for an investor buying into that fund, they get a diversified portfolio of securities that is going to shorten in maturity, much like an individual bond would, and yet also has this predetermined liquidation date, again, much like an individual bond.

And so I think it provides a combination of some of the benefits we see with an iShare -- that diversification, that liquidity, that transparency -- but in a vehicle that addresses some of the objectives of individuals who traditionally buy individual bonds and who ladder bonds.

Call 1-800-iShares to request a prospectus, which includes investment objectives, risks, fees, expenses and other information that you should read and consider carefully before investing. Investing involves risk, including possible loss of principal.

Diversification may not protect against market risk.

Bonds and bond funds will decrease in value as interest rates rise. A portion of a municipal bond fund’s income may be subject to federal or state income taxes or the alternative minimum tax. Capital gains, if any, are subject to capital gains tax.

The iShares S&P AMT-Free Municipal Series (“Muni Series”) ETFs may be subject to geographic or asset class risk. The Muni Series ETFs are subject to credit risk, which refers to the possibility that the debt issuers will not be able to make principal and interest payments. Shares of the Muni Series ETFs trade at market price, which may be greater or less than net asset value. Each Muni Series ETF (“Fund”) will terminate on or about August 31 of the year in the Fund’s name. An investment in the Fund(s) is not guaranteed, and an investor may experience losses, including near or at the termination date. In the final months of the Fund’s operation, as the bonds it holds mature, its portfolio will transition to cash and cash-like instruments. Following the Fund’s termination date, the Fund will distribute substantially all of its net assets, after deduction of any liabilities, to then-current investors without further notice and will no longer be listed or traded. The Funds do not seek to return any predetermined amount.

During the final three months prior to the Fund’s planned termination date, its yield will generally tend to move toward prevailing tax-exempt money market rates, and may be lower than the yields of the bonds previously held by the Fund and lower than prevailing yields for bonds in the market. The rate of Fund distribution payments may adversely affect the tax characterization of an investor’s returns from an investment in the Fund relative to a direct investment in municipal bonds. If the amount an investor receives as liquidation proceeds upon the Fund’s termination is higher or lower than the investor’s cost basis, the investor may experience a gain or loss for tax purposes.

There can be no assurance that an active trading market for shares of an ETF will develop or be maintained.

The iShares Funds (“Funds”) are distributed by SEI Investments Distribution Co. (“SEI”). BlackRock Fund Advisors (“BFA”) serves as the investment advisor to the Funds. BlackRock Fund Distribution Company (“BFDC”) assists in the marketing of the Funds. BFA and BFDC are affiliates of BlackRock, Inc., none of which is affiliated with SEI.

The iShares Funds are not sponsored, endorsed, issued, sold or promoted by Standard & Poor’s. This company does not make any representation regarding the advisability of investing in the Funds. Neither SEI, nor BlackRock Institutional Trust Company, N.A., nor any of their affiliates, are affiliated with the company listed above.

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