Invesco Taxable Municipal Bond ETF's Average People Pillar and Process Pillar ratings result in a Morningstar Medalist Rating of Neutral. The portfolio maintains a cost advantage over competitors, priced within the second-cheapest fee quintile among peers.  

 The strategy’s management team earns an Average People Pillar rating. The strategy gets an Average Process Pillar rating.  The strategy's parent organization earns the firm an Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Invesco Taxable Municipal Bond ETF earns an Average Process Pillar rating. Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. The leading factor in the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. Low costs across its parent firm's funds, whose fees, on average, rank in the middle quintile of their respective category, also contribute to the process. The pattern of low costs at the firm indicates that it is focused on delivering strong results for investors. 

The investment strategy as stated in the fund's prospectus is: 

The investment seeks to track the investment results (before fees and expenses) of the ICE BofA US Taxable Municipal Securities Plus Index.  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, and in the U.S. domestic market.  

 This strategy's 12-month yield is 3.7%, lower than its average peers' 4.4%. Plus, its 30-day SEC yield (a measure similar to yield-to-maturity) sits at 4.9%. A lower yield tends to indicate lower credit risk. The portfolio has a higher average surveyed credit quality of AA, compared with the typical peers' BBB, and it holds no non-investment-grade assets, despite the average peers' 4%. Strategies with lower credit risk can typically withstand market turmoil more effectively. In terms of interest-rate risk, compared with others in the Long-Term Bond category, this fund maintains a lower average effective duration of 8.0 years compared to the category's 11.7 years. The shorter a strategy's duration, the less sensitive it is to shifts in interest rates. This fund, with an 8.0-year duration, is expected to gain 8.0% of its net asset value if interest rates drop by 1 percentage point, and vice versa.

Average

Process

Invesco’s fixed income team is good but unexceptional, earning the strategy an Average People Pillar rating. There are four managers listed on the fund: Gary Jones, Peter Hubbard, Jeremy Neisewander, Philip Fang. Experience on the team is abundant, with 17 years of average portfolio management experience. Together, they manage a total of five strategies, with an asset-weighted average Morningstar Medalist Rating of Neutral. This means, in aggregate, the team falls short and will struggle to produce positive alpha relative to the category median.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

People

Invesco succeeds in a number of areas but also has its share of subpar offerings, along with many others that land somewhere in the middle. A mid-2023 change of CEO, from longtime chief Marty Flanagan to veteran Invesco executive Andrew Schlossberg, is noteworthy, and several other executives retired or departed in 2023. Portfolio-manager shuffles aimed at bolstering poor performers, which began under Flanagan, have continued under Schlossberg, who told Morningstar his most important aim is bolstering “investment quality.” However, major changes of direction or approach are unlikely. The firm retains a Morningstar Parent rating of Average. 
Invesco’s international-equity teams in Texas and New York remain solid. However, the extensive U.S.-equity lineup needs improvement. Fixed-income offerings run the gamut: The multisector and short-term-bond areas are good, but corporate high-yield is less impressive. The firm’s exchange-traded fund lineup includes the popular Nasdaq-focused QQQ; passive strategies make up around 37% of Invesco’s assets under management. Invesco has not been averse to trying new types of strategies, and it was among the firms that immediately launched a spot bitcoin ETF after SEC approval in early 2024.
The picture outside the United States is mixed. Fund performance has been subpar in Asia, and while the picture has brightened in the United Kingdom and Europe, that region still can’t be considered a strength.

Parent

Invesco Taxable Municipal Bond ETF

BAB tracks a broad index of taxable investment-grade municipal debts selected and weighted by market value.

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.

BAB: A Muni Bond Play, But Suboptimal Results

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

BAB: A Different View On Muni Bonds, But Not A Better One

With the expectation that the U.S. Federal Reserve will taper interest rate hikes in the second half of 2023, fixed income investors are turning to more yield. They may find what they're looking for in municipal bonds.

As Municipal Bonds Draw More Interest, Consider These ETFs

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Invesco Total Return Bond ETF

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Invesco Variable Rate Investment Grade ETF

With uncertainty around interest rates, inflation, and the possibility of recession, most investors will benefit by staying within the short to intermediate part of the curve when allocating to fixed income ETFs. Similarly, opting for balanced fixed income exposure as opposed to making big bets is recommended in the current environment.

7 Fixed Income ETFs to Consider in the Current Environment

Fixed income has seen a broad boost since late last year. This includes taxable muni bonds and BAB by extension. The fund is up sharply since my last buy call and gains could continue. However, I think it makes sense to get a bit more cautious whenever I see big gains like this.

BAB: After A Strong Run, Time To Moderate Expectations (Rating Downgrade)

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Invesco Fundamental High Yield Corporate Bond ETF

Invesco Variable Rate Preferred ETF

Invesco has six non-core fixed income ETFs that advisors can add to portfolios to create alpha opportunities and increase portfolio diversification. Exposure to non-core fixed income is important as the largest U.S. bond index only provides exposure to approximately 40% of the U.S.

Use Invesco's Non-Core Fixed Income ETFs to Enhance Returns

Invesco S&P Emerging Markets Low Volatility ETF

iShares U.S. Regional Banks ETF

SPDR Portfolio S&P 500 Value ETF

These ETFs traded with an outsized volume yesterday. Let's find out if this trend of extra-interest continues.

4 ETFs to Watch on Huge Investor Attention

The Invesco Taxable Municipal Bond ETF is the only ETF I found that focuses on the taxable municipal segment of the US bond market. Unlike the three CEFs I covered in this segment, BAB gives investors a leverage-free option to invest in. I compare returns between these four, plus corporate bond ETF.

BAB: The Only ETF In The Taxable Municipal Bond Sector

Franklin Investment Grade Corporate ETF

AGF Global Infrastructure ETF

iShares Core S&P Small Cap ETF

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iShares TIPS Bond ETF

These are the questions on every investor's mind: Have markets really priced in the severity of the Fed's campaign against inflation? How bad would a 2023 recession be — if there is one at all?

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I see value in taxable munis, both compared to their tax-exempt muni counterparts and corporate bonds. Duration remains a key risk, but it has come down a bit from a year ago.

BAB: Justifying A Bull Thesis Here

Dimensional National Municipal Bond ETF

First Trust New York Municipal High Income ETF

Blackrock High Yield Muni Income Bond ETF

iShares National Muni Bond ETF

Vanguard Tax-Exempt Bond Index ETF

Muni bond ETFs flourished in 2021, with record asset flows and a number of new launches.

Muni ETFs Multiply In 2021

Invesco China Technology ETF

Invesco Nasdaq 100 ETF

A shortened trading week due to the Thanksgiving holiday didn't stop investors from heading into technology and municipal bonds, as noted in Invesco's fund flows the past week. Exchange traded fund (ETF) investors headed into big tech ahead of the news that a COVID-19 variant, dubbed “Omicron,” was racking South Africa.

Tech and Munis Comprise Invesco ETF Inflows

BlackRock Taxable Municipal Bond Trust

Guggenheim Taxable Municipal Bond & Investment Grade Debt Trust

Nuveen Build America Bond Fund

The taxable municipal bond market is growing and mature. Taxable munis offer a range of benefits for certain investors, in particular insurance companies.

Taxable Munis Deserve Attention

Taxable munis continue to register low defaults and currently have tight supply, which has boosted underlying values.

BAB: Taxable Munis Are A Viable Option, But They Face A Few Headwinds

The Invesco Taxable Municipal Bond Fund (NYSEArca: BAB) once featured “Build America bonds” in its name, hence the ticker “BAB.” While the exchange traded fund's name changed, it remains one of the premier avenues for accessing a broad portfolio of taxable municipal bonds, and with some market observers seeing signs of life in the often [.

The Budding Build America Bond Market Could Boost ‘BAB'

Invesco S&P 500 Quality ETF

Invesco S&P SmallCap Quality ETF

The global economic recovery could be happening at a slower rate than anticipated, which puts low growth strategies and three exchange traded funds (ETFs) from Invesco in focus. Investors who are skeptical about the recovery can opt for low growth ETF strategies from Invesco that focus on quality.

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Investors could be forgiven if, at the height of the coronavirus pandemic, they grew jittery over municipal bonds. Back then, concerns about some states' and municipalities' finances were exposed amid economic shutdowns and accelerating unemployment.

Investors Are Backing ‘BAB' as State and Local Finances Solidify

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Insurers are once again investing in ETFs, but the types of funds have changed.

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Capitol Hill and Wall Street are in two different cities, but when they interact on a regular basis, the results can beneficial for investors. A prime example of investors deriving benefit from a policy push is the recent passage of the American Rescue Plan, which fixed income market observers view as a plus for municipal [.

Biden's American Rescue Plan Boosting Munis, ‘BAB'

To combat low yields, fixed income investors can opt for taxable municipal bonds via ETFs like the Invesco Taxable Municipal Bond ETF (BAB). Getting taxable municipal bonds might seem counterintuitive given that one of the main reasons investors gravitate to munis is because of their tax advantages.

Tax Considerations for Municipal Bond Investors

It's been a while since the Invesco Taxable Municipal Bond Fund (NYSEArca: BAB) was one of the municipal bond ETFs generating buzz, but that could change and do so imminently thanks to the American Rescue Plan. The $2.29 billion BAB tracks the ICE BofAML US Taxable Municipal Securities Plus Index, which uses a sampling methodology [.

American Rescue Plan Could Boost BAB

With a Joe Biden administration looming, municipal bonds have been in play for fixed income investors. One pertinent idea is a taxable municipal bond, the focus of the Invesco Taxable Municipal Bond ETF (BAB).

The Fastest-Growing Fixed Income Sector: Taxable Muni Bonds

Taxable munis offer higher after-tax yields for everyone but those in the highest tax brackets, compared to tax-exempt munis. With markets hitting new highs, taking on less risk seems prudent. As a non-leveraged ETF, BAB offers a path to do so.

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The best municipal bond ETFs for Q1 2021 are BAB, MMIN, and IBMQ.

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General Dynamics

Huntington Ingalls Industries

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Northrop Grumman

Raytheon

World-leading, market-dominating, technologically savvy defence companies supplying the free world are trading at high-single digit free cash flow yields. I believe an increasingly hostile global environment is likely over the next 10 years as China vs. USA continues, and as globalisation deaccelerates due to populist politics.

News for Invesco Taxable Municipal Bond ETF ETF (BAB)