Insight Build efficient bond ladders with Invesco BulletShares ETFs

6 October 2026
Point of view, looking up ladder sticking through hole in ceiling revealing blue sky

Key takeaways

  • A bond ladder staggers maturity dates to help provide regular cash flow, manage interest rate risk, and provide flexibility across changing interest rates.

  • As bonds mature, the proceeds can be reinvested at prevailing rates, used as income, or to fund specific needs.

  • Invesco BulletShares UCITS ETFs combine defined maturities with the diversification, liquidity, and convenience of ETFs to help build cost-efficient bond ladders.

Having a flexible and resilient income strategy is crucial because markets are ever-changing. Bond ladders are a solution to help investors manage interest rate risk, enhance diversification, and support income goals now and in the future. Using defined maturity ETFs in a bond ladder can be a convenient and cost-effective solution.

Why consider a bond ladder?

A bond ladder is a portfolio of bonds with staggered maturity dates. As each bond matures, the proceeds can be reinvested in a new bond at current rates, used as income, or for specific financial needs.

There are two key reasons why bond ladders can be advantageous:

1. They can provide a predictable and steady income.

2. A portfolio’s maturity and duration profiles are flexible and can be tailored and adjusted for interest rate changes. If interest rates increase, any proceeds from maturing bonds can be reinvested at higher future interest rates. If interest rates decrease, only a portion of a laddered portfolio can be reinvested during a low-rate phase of the interest rate cycle.

Build a bond ladder with defined maturity ETFs

Defined maturity ETFs, such as our BulletShares UCITS ETFs, offer a streamlined way to construct a bond ladder. They hold a diversified basket of bonds that mature in a specific year, combining the benefits of individual bonds with the convenience, diversification, and liquidity of ETFs. Investing across various BulletShares UCITS ETF maturities can help build a cost-effective, diversified laddered portfolio to manage interest rate risk and cash flows.

Unlike traditional bond funds, which typically maintain a constant duration and are more sensitive to interest rate changes, BulletShares ETFs allow investors to:

  • Customise maturity profiles to align with financial goals
  • Reduce interest rate risk by holding bonds to their maturity date
  • Reinvest proceeds at potentially higher yields when rates rise
  • Maintain higher-yielding bonds when rates fall

Consider a bond ladder built with BulletShares ETFs maturing annually from 2027 to 2033. (See chart below.) Each year, as a BulletShares ETF matures, the proceeds can be reinvested into a new ETF with a later maturity, maintaining the ladder’s structure and adapting to the current rate environment.

Bond ladder example
Diagram of a bond ladder showing reinvestment of maturing bonds over three years to maintain staggered maturities.

Hypothetical example for illustrative purposes only. 

We offer a range of BulletShares ETFs including targeted exposure to the US dollar (USD), pound (GBP)-hedged share classes for those seeking to mitigate currency risk, and euro (EUR) investment grade corporate bonds, with maturity ranges from 2026 to 2030.

Whatever you’re looking to accomplish with a bond portfolio, our range of BulletShares ETFs can offer convenient, cost-effective solutions to help meet income goals. 

Learn more about Invesco BulletShares UCITS ETFs. 

Related insights

  • Investment risks

    The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

    The creditworthiness of the debt the Fund is exposed to may weaken and result in fluctuations in the value of the Fund. There is no guarantee the issuers of debt will repay the interest and capital on the redemption date. The risk is higher when the Fund is exposed to high yield debt securities. 

    Changes in interest rates will result in fluctuations in the value of the fund. 

    The Fund may be exposed to the risk of the borrower defaulting on its obligation to return the securities at the end of the loan period and of being unable to sell the collateral provided to it if the borrower defaults.

    The Fund intends to invest in securities of issuers that manage their ESG exposures better relative to their peers. This may affect the Fund’s exposure to certain issuers and cause the Fund to forego certain investment opportunities. The Fund may perform differently to other funds, including underperforming other funds that do not seek to invest in securities of issuers based on their ESG ratings. 

    The Fund is invested in a particular geographical region, which might result in greater fluctuations in the value of the Fund than for a fund with a broader geographical investment mandate.

    It may be difficult for the Fund to buy or sell certain instruments in stressed market conditions. Consequently, the price obtained when selling such instruments may be lower than under normal market conditions. 

    Currency hedging between the base currency of the Fund and the currency of the Share class may not completely eliminate the currency risk between those two currencies and may affect the performance of the Share class.

    The term of the Fund is limited. The Fund will be terminated on the Maturity Date. During the Maturity Year, as the corporate bonds held by the Fund mature and the Fund’s portfolio transitions to cash and Treasury Securities, the Fund’s yield will generally tend to move toward the yield of cash and Treasury Securities and thus may be lower than the yields of the corporate bonds previously held by the Fund and/or prevailing yields for corporate bonds in the market. The issuers of debt securities (especially those issued at high interest rates) may repay principal before the maturity of such debt securities. This may result in losses to the Fund on debt securities purchased at a premium. The Fund may be terminated in certain circumstances which are summarised in the section of the Prospectus titled “Termination”.

    Important information

    Data as at 31 August 2026 unless otherwise stated. This is marketing material and not financial advice. It is not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. Views and opinions are based on current market conditions and are subject to change.

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    For the full objectives and investment policy please consult the current prospectus or the Fund's Supplement.

    Not all share classes of this fund may be available for public sale in all jurisdictions and not all share classes are the same nor do they necessarily suit every investor.

    UCITS ETF’s units / shares purchased on the secondary market cannot usually be sold directly back to UCITS ETF. Investors must buy and sell units / shares on a secondary market with the assistance of an intermediary (e.g. a stockbroker) and may incur fees for doing so. In addition, investors may pay more than the current net asset value when buying units / shares and may receive less than the current net asset value when selling them.

    Issued by Invesco Investment Management Limited, 4th Floor, The Observatory, 7-11 Sir John Rogerson’s Quay, Dublin 2, D02 VC42, Ireland, regulated by the Central Bank of Ireland.

    EMEA5947797/2026