In an effort to give income-seeking tax-exempt investors more yield opportunities, liquidity, and maturity diversification, Invesco Ltd., the global independent investment management firm, is expanding its BulletShares Municipal Bond portfolios ETF suite, the firm said last week.
As part of a larger ETF suite expansion, the bond laddering product line will expand the stated year of maturity of the BulletShares Municipal Bond portfolios [BSMU] to 2030, according to a press release.
The full BulletShares ETF Suite is made up of 10 municipal bond ETFs, eight high-yield corporate bond ETFs, 10 corporate bond ETFs, and four emerging market debt ETFs that each hold a portfolio of bonds that all mature in a target year.
Invesco’s ETFs combined the advantages of ETF investing with benefits of individual bonds by offering liquidity, relatively low costs, and broad diversification for investors who need a laddered income stream to match income with future cash-flow needs.
“Adding new maturities to the BulletShares suite speaks to Invesco’s commitment to the continued growth of the decade-old product line,” John Hoffman, Head of Americas, ETFs & Indexed Strategies at Invesco, said in the release.
The expansion also extends the stated maturity of the BulletShares Corporate Bond ETF [BSCU] to 2030, while the stated maturity of the BulletShares High Yield Corporate Bond ETF [BSJS] was expanded to 2028.
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, according to the firm.
“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,” Jason Bloom, director of Global Macro ETF Strategy at Invesco, said in the release.
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.
During its final year of maturity, the proceeds of the BulletShares Municipal ETFs will be reinvested in cash and cash equivalents, including, without limitation, variable-rate demand obligations (VRDOs) and interest-bearing cash, and in certain situations, other instruments, such as low supply.
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.
Invesco BulletShares USD Municipal Bond 2030 Index provides exposure to a diversified basket of U.S. dollar-denominated municipal bonds issued by U.S. states, state agencies, or local governments, all with a maturity — or, in some cases, effective maturity — of 2030.
Overall, Invesco managed $1.1 trillion in assets on behalf of clients worldwide as of July 31, 2020, according to the firm.
