Eaton Vance and Invesco PowerShares roll out Build America bond funds

Eaton Vance Management and Invesco PowerShares on Tuesday announced new investment products offering exposure to the government's Build America Bonds stimulus program, which seeks to spur construction and repair projects by state and local governments.
FEB 19, 2010
Eaton Vance Management and Invesco PowerShares on Tuesday announced new investment products offering exposure to the government's Build America Bonds stimulus program, which seeks to spur construction and repair projects by state and local governments. Eaton Vance Management is launching an actively managed mutual fund called the Eaton Vance Build America Bond Fund. Invesco said trading of an exchange-traded fund, the PowerShares Build America Bond Portfolio, began Tuesday on the NYSE Arca exchange. Eaton Vance Management, a subsidiary of Boston-based Eaton Vance Corp., said its product is the first actively managed mutual fund to invest in taxable municipal obligations under the federal program. The fund will offer three classes of shares for purchase, each with a minimum investment of $1,000. Cynthia Clemson, an Eaton Vance municipal investments co-director, will manage the fund with Craig Brandon, manager of 10 Eaton Vance tax-exempt mutual funds. Invesco PowerShares, a unit of Atlanta-based Invesco Ltd., said its product is the first ETF to provide investors access to the Build America program, which was developed as part of the federal stimulus plan enacted in February. ETFs are funds that investors can trade during daily sessions — unlike mutual funds bought and sold at end-of-the-day prices — and typically mirror stock or bond indexes. Invesco's product is designed to mirror the BofA Merrill Lynch Build America Bond Index, which tracks performance of taxable municipal debt issued under the Build America program. The program allows state and local governments to issue taxable bonds for capital projects and to receive a new direct federal subsidy payment from the Treasury Department for a portion of their borrowing costs. Ben Fulton, a product development executive at Invesco PowerShares, said individual retail investors have had little access so far to a program that has issued more than $48 billion in bonds to date.

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