Invesco adds three defined maturity bond ETFs to BulletShares suite
Invesco, a global provider of exchange-traded funds (ETFs), has added three new ETFs to the BulletShares ETF suite, which offers investors access to customised bond maturities in a transparent1 ETF structure.
The new BulletShares ETFs expand the stated year of maturity of the firm’s BulletShares High Yield Corporate Bond, BulletShares Corporate Bond and BulletShares Municipal Bond portfolios. The new funds are: BulletShares 2028 High Yield Corporate Bond ETF (BSJS); BulletShares 2030 Corporate Bond ETF (BSCU); BulletShares 2030 Municipal Bond ETF (BSMU).
“BulletShares continues to be an innovative solution for investors who want to further democratise the bond laddering process or attain precise income exposure, offering them a convenient and liquid way to meet their income needs,” says John Hoffman, Head of Americas, ETFs & Indexed Strategies at Invesco. “Adding new maturities to the BulletShares suite speaks to Invesco’s commitment to the continued growth of the decade-old product line.”
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.
“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," adds Jason Bloom, Director of Global Macro ETF Strategy at Invesco. “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 maximise maturity diversification.”
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.
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 utilised 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,” says 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.”