The Build America Bond program is slated to mature at the end of 2010, Fulton notes, but there’s been discussion about the possibility of extending it. The prospectus is written to reflect the impact any potential changes to the program may have on the fund, whether it’s expanded or ended. Fulton says that nearly $50 billion in Build America Bonds has been issued to date, and estimates are it could reach close to $100 billion by the end of next year.
“BAB bonds have a life of their own. First they were viewed as tools for the government’s stimulus plan only. Now they are also marketed as a fixed income investment focused on rebuilding USA’s aging infrastructure. We believe this is a product that will appeal to the masses compared to only the highest tax bracket focus of tax free municipal ETFs,” Fulton says.
For more information on municipal bonds, visit our municipal bonds category.
Max Chen contributed to this article.