Advisors Asset Management Build America Bond Portfolio is a fixed income investment vehicle focused primarily on long-term Build America Bonds. Its central objective is to deliver current income and preserve capital by allocating assets to these uniquely structured taxable municipal bonds, which originated under the American Recovery and Reinvestment Act of 2009. Build America Bonds are notable for their federal subsidies, provided to issuers to reduce overall borrowing costs, and are taxed at the federal level, differentiating them from traditional municipal bonds. This portfolio invests in investment grade bonds, aiming to balance yield with credit quality, and is structured as a Regulated Investment Company (RIC). The instrument primarily appeals to investors seeking exposure to municipal credit with potentially attractive yields and relatively low historical default rates compared to corporate bonds. With the cessation of new Build America Bond issuance since 2010, the portfolio invests exclusively in outstanding issues, contributing to potential liquidity considerations. Advisors Asset Management Build America Bond Portfolio plays a distinct role in the market by offering fixed income exposure that blends government-supported municipal credit quality with the characteristics of taxable securities.
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