A suite of defined maturity bond ETFs that can provide cash flow, the flexibility to customize maturities and the transparency to know what you own. BulletShares are designed to hold bonds to maturity. Each BulletShares ETF matures in the stated year of the fund and returns its net assets to shareholders. |
BulletShares® ETFs are designed to combine the benefits of individual bonds with the advantages of ETFs. These innovative products provide: |
BulletShares ETFs can help professionals because they are: |
BulletShares ETFs enable investors to build customized portfolios tailored to specific maturity investment goals. Bulletshares ETFs can be used for a variety of investment strategies, such as:
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A laddered portfolio consists of bonds with varying terms to maturity. As bonds in a laddered portfolio mature, the proceeds can be used to cover lifestyle needs, or can be reinvested in newly issued bonds.
Bond laddering offers a number of potential benefits but creating bond ladders with individual bonds can be time consuming and cost prohibitive. By contrast, BulletShares ETFs offer a cost-effective and convenient approach to portfolio laddering. |
There are two maturity processes – one for high-yield and emerging markets and one for investment grade. Both processes terminate the fund on or around the 15th of December. |
One of the distinguishing benefits of owning bonds to maturity, is that the investor has a good deal of visibility into what their total rate of return is likely to be. This is especially helpful in a rising rate environment. The design of BulletShares preserves this benefit. |
Source: Bloomberg, LP as of Dec. 31, 2018. Invesco BulletShares 2018 Corporate Bond Fund matured on Dec. 27, 2018, and is no longer offered for sale. Past performance is no guarantee of future results.
As bonds reach their final year, and their duration shortens, their price volatility gradually declines. In this way, a BulletShares ETF becomes a low-volatility portfolio as it approaches maturity: |
Source: Bloomberg, LP as of Dec. 31, 2018. Invesco BulletShares 2018 Corporate Bond Fund matured on Dec. 27, 2018, and is no longer offered for sale. Past performance is no guarantee of future results.
It’s very similar to owning an individual bond, in that while you hold that bond, it’s value may rise or fall, due to changes in interest rates or credit spreads. As you approach maturity, that volatility subsides. |
Each BulletShares ETF currently holds anywhere from 70 to 400 bonds, depending on the size of the fund. This broad exposure should help reduce the impact of such a credit event. In addition to this diversification, the underlying index also has screens for credit quality that reduce the exposure to defaulting bonds. |
When a bond is called, the proceeds are invested into 13-week T-bills until the next monthly rebalance. At that time, the bond is replaced with another new corporate issue. Bonds are typically called at a premium when rates fall and therefore should not be a major concern for shareholder. |
1 BulletShares ETF and bonds generally present less short-term risk and volatility than stocks, the bond market is volatile and investing in bonds involves interest rate risk; as interest rates rise, bond prices usually fall, and vice versa. Bonds also entail issuer and counterparty credit risk, and the risk of default. Additionally, bonds generally involve greater inflation risk than stocks. Unlike individual bonds, BulletShares ETFs have fees and expenses and most bond funds do not have a maturity date, so holding them until maturity to avoid losses caused by price volatility is not possible. Investors should talk with their advisors regarding their situation before investing.
2 The funds do not seek a predetermined amount at maturity, and the amount an investor receives may be worth more or less than the original investment. In contrast, when an individual bond matures, an investor typically receives the bonds par (or face value).
3 Shares are not individually redeemable and owners of the shares may acquire those shares from the fund and tender those shares for redemption to the fund in creation unit aggregations only, typically consisting of 100,000 or 150,000 shares.
4 ETFs disclosure their portfolio holdings daily.
5 Diversification does not guarantee a profit or eliminate the risk of loss
6 Holdings subject to change. Refer to invesco.com/us for most current holdings.
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