Invesco Taxable Municipal Bond ETF

BAB

Market cap $930M

BAB is a well-constructed, diversified ETF focused on taxable municipal bonds, prioritizing investment-grade credit and moderate maturities. Despite sound design, BAB's yield (around 4%) is lower than alternatives like USFR, BBN, SGOV, or SHYM, given similar or less risk. The fund's conservative approach limits yield; I believe more selective or active strategies can outperform broad muni index funds like BAB.

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Though the S&P 500 has recently returned to positive territory in terms of year-to-date (YTD) performance, turbulence throughout 2025 so far may have pushed skittish investors away from stocks and toward bonds.

Evaluating Invesco Taxable Municipal Bond ETF (BAB) as a "buy" due to its quality yield and relative value in a volatile equity market. Historically lukewarm on BAB, but current market conditions and equity volatility make it a more attractive investment for 2025 and beyond. BAB offers a passive investment approach, contrasting with leveraged CEFs, and tracks US dollar-denominated taxable municipal debt.

Invesco Taxable Municipal Bond ETF is a passive ETF that tracks the performance of US dollar-denominated taxable municipal debt. The outlook for BAB is modest, with a potential for 2-3% returns, which is weak compared to inflation and cash offerings. Low levels of issuance in the taxable municipal bond sector could be a bullish catalyst for the Fund.

Invesco Taxable Municipal Bond ETF offers exposure to the municipal bond market, providing diversification and potential higher yields. The BAB ETF invests primarily in high-grade bonds, with a concentration in the Local Authorities sector, which can be both a strength and a risk. BAB has underperformed compared to other muni bond funds, potentially due to its duration and sampling strategy, making it a less exciting investment option.

Invesco Taxable Municipal Bond ETF invests in taxable debt issued by U.S. states, their subdivisions and their entities.