Still, BABs have outperformed long-dated U.S. government bonds this year. “Build America bonds’ 5.4 percent loss this year is less than half the nearly 11 percent drop in value for federal debt with an average maturity of 27 years,” reported Michelle Kaske for Bloomberg, citing Bank of America Merrill Lynch data.
BAB has a 30-day SEC yield of 5.07%, or 119 basis points higher than 30-year Treasuries. The extra yield that investors demand to buy Build Americas maturing in 26 years rather than 30-year federal debt was 1.53 percentage points July 25, the widest spread since September, according to Bloomberg.
As has been the case with other bond funds, investors have pulled money from Build America ETFs. For example, BAB had $981 million in assets when we last profiled the ETF on June 20.
PowerShares Build America Bond Portfolio
ETF Trends editorial team contributed to this post.