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Fund (NYSEArca: BAB) was one of the municipal bond ETFs generating buzz, but that could change and do so imminently thanks to the American Rescue Plan.
The $2.29 billion BAB tracks the ICE BofAML US Taxable Municipal Securities Plus Index, which uses a sampling methodology and “is designed to track the performance of US dollar-denominated taxable municipal debt publicly issued by US states and territories, and their political subdivisions, in the US market,” according to Invesco.
BAB is a relevant near-term consideration for conservative, income-seeking investors because the recently passed American Rescue Plan features plenty of assistance to help states and cities shore up their finances.
Invesco Launches Europeâs First ETF For Exposure To Taxable Municipal Bonds Date
16/02/2021
Today’s launch of the Invesco US Municipal Bond UCITS ETF provides income-starved investors an opportunity for higher yields than are generally available from the US investment grade credit market without taking on additional credit risk. The ETF is the first of its kind in Europe.
Gary Buxton, Head of EMEA ETFs and Indexed Strategies at Invesco, said: “We are pleased to be bringing the first municipal bond ETF to the European market. This launch opens the door to an asset class that until now has been difficult for investors to access. Municipal bonds, or ‘munis’ for short, offer higher yields, better average credit ratings and much lower default rates than US investment grade credit
Invesco launches first-of-a-kind ETF in Europe
Invesco has launched an ETF investing in taxable municipal bonds issued by US local governments.
Listed in London, the Invesco US Municipal Bond Ucits ETF provides generally higher yields than are available from US investment grade corporate bonds without taking as much risk, the firm said.
The index the ETF tracks - the ICE BofA US Taxable Municipal Securities Plus Index - is currently yielding around 0.30% more than the typical US investment grade credit benchmark, while offering higher credit quality, said Invesco, adding that the ETF is the first of its kind in Europe.