January 11, 2019 A few days back, we mentioned that GBAB had help up very well during the turmoil in Nov/December. And yesterday, we came across an article discussing GBAB as well as BBN and BAB: all include Build America Municipal Bonds. Copied here is one paragraph, and the full article is linked below. GBAB is paying 6.8%. Long term investors can buy now, but we suggest putting in a BUY LIMIT order at the lower price of $21…and wait.
For the taxable municipal bonds, I would recommend BlackRock Build America Bond Trust (BBN), Guggenheim Build America Bonds Managed Duration Trust (GBAB), and Invesco Build America Bond Portfolio ETF (BAB). BAB is good for those who don’t like leverage and currently yields 3.8%. BBN and GBAB have higher yields (around 7%) and are what I have been holding in my portfolio, but they are leveraged, which will make the volatility more severe, both to the up and down side. They both have higher quality A, AA, and AAA bonds though, so credit quality isn’t much of a risk. I have enjoyed having these two Build America Bonds funds in my portfolio since 2014 and they have not disappointed me. The current income is great, plus when the stock market has gone south, these bonds have done well at bringing balance to the portfolio. Since inception in 2010, GBAB has returned 8.53% in total market returns and BBN has returned 9.75%. If you have money to invest in just one of the two, BBN seems to be the clear winner both in terms of its current status and total market return since inception.
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