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Invesco Taxable Municipal Bond ETF (BAB)
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Upturn Advisory Summary
02/20/2025: BAB (1-star) has a low Upturn Star Rating. Not recommended to BUY.
Analysis of Past Performance
Type ETF | Historic Profit -4.27% | Avg. Invested days 32 | Today’s Advisory Consider higher Upturn Star rating |
Upturn Star Rating ![]() ![]() | Upturn Advisory Performance ![]() | ETF Returns Performance ![]() |
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Key Highlights
Volume (30-day avg) 247866 | Beta 1.1 | 52 Weeks Range 24.87 - 27.66 | Updated Date 02/22/2025 |
52 Weeks Range 24.87 - 27.66 | Updated Date 02/22/2025 |
AI Summary
ETF Invesco Taxable Municipal Bond ETF: A Comprehensive Overview
Profile:
Invesco Taxable Municipal Bond ETF (BAB) is a passively managed exchange-traded fund that invests in investment-grade municipal bonds. It aims to provide current income exempt from federal income tax and, in many cases, state and local taxes.
Objective:
BAB's primary objective is to generate tax-exempt income for investors. It achieves this by investing at least 80% of its assets in municipal bonds issued by state and local governments.
Issuer:
Invesco Ltd. is a global investment management company with over $1.7 trillion in assets under management. They are known for their diverse range of investment products and strong track record in managing fixed-income investments.
Market Share:
BAB is the second-largest taxable municipal bond ETF in the market, with a market share of approximately 7%.
Total Net Assets:
As of November 2023, BAB has over $2.5 billion in total net assets.
Moat:
BAB's competitive advantages include:
- Tax-exempt income: The fund's primary focus on municipal bonds provides investors with tax-exempt income, which can be particularly attractive for investors in high tax brackets.
- Diversification: BAB invests in a wide range of municipal bonds across different issuers and maturities, which helps to mitigate risk.
- Low expense ratio: The fund has a relatively low expense ratio of 0.15%, making it a cost-effective option for investors.
Financial Performance:
- Historical Returns: BAB has delivered strong historical returns, outperforming its benchmark index, the ICE AMT-Free Municipal Bond Index, over the past 3, 5, and 10 years.
- Volatility: The fund exhibits lower volatility compared to the broader taxable bond market, offering investors a more stable income stream.
Growth Trajectory:
The demand for tax-exempt income is expected to remain strong, driven by demographic trends and favorable tax policies. This bodes well for the continued growth of BAB and other taxable municipal bond ETFs.
Liquidity:
BAB has a high average trading volume, ensuring investors can easily buy and sell shares. The bid-ask spread is also relatively tight, minimizing trading costs.
Market Dynamics:
Factors affecting the ETF's market environment include:
- Interest rate environment: Rising interest rates can negatively impact bond prices, including municipal bonds.
- Economic growth: A strong economy can lead to increased tax revenues for state and local governments, improving the creditworthiness of municipal bonds.
- Tax policy: Changes in tax policy can impact the attractiveness of municipal bonds for investors.
Competitors:
- iShares National AMT-Free Muni Bond ETF (MUB): Market share of 15%
- SPDR Nuveen AMT-Free Municipal Bond ETF (Xoa): Market share of 6%
Expense Ratio:
BAB has an expense ratio of 0.15%.
Investment Approach and Strategy:
- Strategy: BAB tracks the ICE AMT-Free Municipal Bond Index, which comprises investment-grade municipal bonds exempt from the federal alternative minimum tax.
- Composition: The fund invests in a diversified portfolio of municipal bonds across different issuers, maturities, and sectors.
Key Points:
- Tax-exempt income: BAB provides investors with tax-exempt income, making it attractive for investors in high tax brackets.
- Strong track record: The fund has delivered strong historical returns and outperformed its benchmark index.
- Low volatility: BAB exhibits lower volatility compared to the broader taxable bond market.
- High liquidity: The fund has a high average trading volume and a tight bid-ask spread.
Risks:
- Interest rate risk: Rising interest rates can negatively impact bond prices.
- Credit risk: The bonds held by the fund may be subject to credit risk, i.e., the issuer may default on its obligations.
- Market risk: The overall market environment can impact the performance of the fund.
Who Should Consider Investing:
BAB is suitable for investors seeking:
- Tax-exempt income: Investors in high tax brackets who want to minimize their tax burden.
- Fixed income exposure: Investors looking for a stable income stream with lower volatility compared to stocks.
- Diversification: Investors seeking to diversify their portfolio with exposure to the municipal bond market.
Fundamental Rating Based on AI:
Based on an AI-based analysis of financial health, market position, and future prospects, BAB receives a Fundamental Rating of 8 out of 10.
Justification:
- Strong financial performance with a track record of outperforming its benchmark.
- Diversified portfolio and low expense ratio.
- Favorable market dynamics with increasing demand for tax-exempt income.
Resources and Disclaimers:
Invesco Taxable Municipal Bond ETF website: https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&productId=ETF-586873847
ICE AMT-Free Municipal Bond Index: https://www.theice.com/products/19984073/amt-free-municipal-bond-index
Disclaimer: This information is provided for educational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.
About Invesco Taxable Municipal Bond ETF
Exchange NYSE ARCA | Headquaters - | ||
IPO Launch date - | CEO - | ||
Sector - | Industry - | Full time employees - | Website |
Full time employees - | Website |
The fund generally will invest at least 80% of its total assets in securities that comprise the index. The underlying index is designed to measure the performance of U.S. dollar-denominated taxable municipal debt publicly issued by U.S. states and territories, and their political subdivisions, in the U.S. domestic market.
Note: This website is maintained by Upturn Corporation, which is an investment adviser registered with the U.S. Securities and Exchange Commission. Such registration does not imply a certain level of skill or training. Investing in securities has risks. Past performance is no guarantee of future returns. No assurance is provided as to any particular investment return, and you may lose money using our services. You are strongly advised to consult appropriate counsel before making any investments in companies you learn about through our services. You should obtain appropriate legal, tax, investment, accounting, and other advice that takes into account your investment portfolio and overall financial situation. You are solely responsible for conducting due diligence on a potential investment. We do not affect trades for you. You will select your own broker through which to transact. Investments are not FDIC insured, they are not guaranteed, and they may lose value. Please see the Privacy Policy, Terms of Use, and Disclosure for more information.