Invesco debuted three new BulletShares ETFs today that offer investors access to customized bond maturities in a transparent ETF structure.
The new ETFs expand the stated year of maturity of the firm’s BulletShares High Yield Corporate Bond, BulletShares Corporate Bond and BulletShares Municipal Bond portfolios:
- BulletShares 2028 High Yield Corporate Bond ETF (Ticker: BSJS)
- BulletShares 2030 Corporate Bond ETF (Ticker: BSCU)
- BulletShares 2030 Municipal Bond ETF (Ticker: BSMU).
John Hoffman, Head of Americas, ETFs & Indexed Strategies at Invesco, said BulletShares continues to be an innovative solution for investors who want to further democratize the bond laddering process or attain precise income exposure, offering them a convenient and liquid way to meet their income needs.
“Adding new maturities to the BulletShares suite speaks to Invesco’s commitment to the continued growth of the decade-old product line,” Hoffman said.
BulletShares ETFs seek to combine the advantages of ETF investing with the benefits of individual bonds by offering increased liquidity, relatively low costs and broad diversification. This may complement the potential ability for monthly income and cash distribution at termination, acting like an individual bond. Through this structure, BulletShares ETFs may offer income-seeking investors a unique and easily accessible way to build or manage a laddered income stream to help match income with future cash-flow needs.
Jason Bloom, Director of Global Macro ETF Strategy at Invesco, said the unique benefit of BulletShares ETFs is that they are traded on equity exchanges, making it easier for investors to roll expiring maturities out to a later date.
“Now that the Invesco BulletShares ETFs offer maturities from 2020 through 2030, clients can target specific maturities to potentially capture opportunities across the yield curve or ladder their portfolios to maximize maturity diversification,” Bloom said.
The new ETFs will track the Nasdaq BulletShares USD High Yield Corporate Bond 2028 Index, the Nasdaq BulletShares USD Corporate Bond 2030 Index and the Invesco BulletShares USD Municipal Bond 2030 Index and will rebalance monthly. The Nasdaq BulletShares Indexes serve as benchmarks to the standard laddered strategy utilized by investment professionals and retail investors.
“Nasdaq’s strong 20-year relationship with Invesco has brought incredible value to the investing public and continues to bring new innovative products for investors,” said Sean Wasserman, VP and Head of Index and Advisory Services for Nasdaq Global Indexes. “We have provided the underlying indexes for the BulletShares suite since inception and are happy to push out these new maturities.”
With the inclusion of the three newly launched BulletShares ETFs, the full suite of funds now has defined years of maturity ranging from 2020 to 2030. Each ETF will terminate no later than December 31 of its respective maturity year. At termination, each ETF will make a cash distribution to the then-current shareholders of its net assets after making appropriate provisions for any liabilities of the fund.
The BulletShares ETF Suite is comprised of eight High Yield Corporate Bond ETFs, 10 Corporate Bond ETFs, 10 Municipal Bond ETFs and four Emerging Market Debt ETFs that each hold a portfolio of bonds that all mature in a target year. During the final year of maturity, bonds held by BulletShares will mature and proceeds will be reinvested cash and cash equivalents, including without limitation U.S. Treasury Bills and investment grade commercial paper for the High Yield Corporate and Emerging Market Debt ETFs. For the BulletShares Municipal ETFs, their proceeds will be reinvested in cash and cash equivalents, including without limitation Variable Rate Demand Obligations (VRDOs) and interest-baring cash; however in some circumstances, such as limited supply, additional instruments may be used.
Invesco also offers the BulletShares® ETF Bond Ladder Tool to provide a convenient way to build a hypothetical laddering strategy with BulletShares, based on maturity and credit criteria, that can help investors better manage their income stream and risk exposure.