Today’s municipal market reflects an evolution years in the making. Since the 2008 financial crisis, the market has weathered liquidity challenges, the demise of the bond insurers and headline-grabbing fiscal struggles among state and local issuers of municipal debt.

At this juncture, the market must contend with slower revenue growth, severely aging infrastructure and escalating costs of pension and health care benefits. Investors are also left to rationalize the rare, but serious, distressed cases such as Detroit and Puerto Rico.

The market is undoubtedly different from its past. But it is most certainly manageable and, we would argue, rich in opportunity. The key to success is careful credit research.

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Monthly Municipal Commentary

BlackRock's Peter Hayes, James Schwartz & Sean Carney review recent market events and provide insight into their municipal bond investment strategy.

Investing involves risk, including possible loss of principal.

Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refers to the possibility that the bond 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.

This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of Jan. 4, 2016, and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. There is no guarantee that any forecasts made will come to pass. Any investments named within this material may not necessarily be held in any accounts managed by BlackRock. Reliance upon information in this material is at the sole discretion of the reader.

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 visiting the iShares ETF and BlackRock Mutual Fund prospectus pages. Read the prospectus carefully before investing.

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