Video

What Happens When a BulletShares® ETF Approaches Maturity?

BulletShares® ETFs Last Year: Reinvest or Sell?

TRANSCRIPT:

The very common question we face from clients is should they hold the BulletShares® until final maturity, or should they roll early or sell the BulletShares® before final maturity and roll those proceeds out to a later dated BulletShares®.

And the question is really, well, it depends. It depends on the asset class and it depends on the client’s needs. The beauty of the BulletShares® is that once the investor has held that fund somewhere close to the final year of its life, they’ve accomplished the lion’s share of the investment objective. 

And because the BulletShares® are so liquid and traded on the equity exchanges it’s much easier to sell BulletShares® and roll those proceeds out to a later date than it would be to sell an individual bond in the over the counter market, and then buy another bond in the over the counter market.

And so, we advise clients to take advantage of that liquidity and be opportunistic in rolling the BulletShares® if that’s convenient for them. If they want to hold the final maturity because they’re matching a future liability and they’re matching cash flows, the BulletShares® will accommodate that need just as well. 

Important Information

    1. The funds do not seek any 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 bond’s par (or face value).
    2. ETFs disclose their full portfolio holdings daily.
    3. Since ordinary brokerage commissions apply for each buy and sell transaction, frequent trading activity may increase the cost of ETFs.

A Look at the Last Year

A detailed view of the BulletShares® ETF maturity process