Eaton Vance is planning a bond mutual fund that will invest in Build America Funds, taxable debt being issued as part of the federal stimulus plan, filings show. It will be called the Eaton Vance Build America Bonds Fund.

Geoff Bobroff, president of Bobroff Consulting, told The Wall Street Journal that this is the first mutual fund he is aware of that is investing in debt tied to the American Recovery and Reinvestment Act of 2009.

The state and local governments that issue the bonds may either elect to have the U.S. Treasury pay 35% of the interest payments on the bonds to investors or to provide a federal tax credit of 35% of the coupon interest on the bond to investors.

To date, municipalities have issued about $27 billion worth of Build America Bonds.

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