The PowerShares Build America Bond exchange-traded fund, the only ETF tied to the Build America Bonds program, began trading Tuesday on NYSE Arca. Also Tuesday, Eaton Vance announced the launch of the Eaton Vance Build America Bond Fund, the first actively managed mutual fund to invest in municipal obligations issued under the American Recovery & Reinvestment Act of 2009.
As Ben Fulton, EVP, global product development at Invesco PowerShares, said of his company’s ETF, “We believe the PowerShares Build America Bond Portfolio provides a convenient, cost-effective way to invest in taxable, investment-grade municipal bonds, which tend to have yields commensurate with similarly rated corporate bonds. Furthermore, we believe the fund will bring much-needed liquidity to a market that will be pivotal in the rebuilding of America’s infrastructure.”
The PowerShares Build America Bond Portfolio tracks the BofA Merrill Lynch Build America Bond Index.
As for Eaton Vance’s fund, Payson Swaffield, chief income investment officer at the company, said, “Build America Bonds represent a win for municipalities [as they] are being used to fund the building and repair of our nation’s bridges, highways, transit systems, schools and other infrastructure, often at lower cost than traditional municipal finance.”
Cynthia Clemson, co-director of municipal investments at Eaton Vance and co-manager of the fund, added, “For investors, what’s compelling about Build America Bonds is their potential for corporate bond-like income combined with the higher credit quality profile of municipal bonds.”