INVESCO ETFS Own maturing BulletShares®?

BulletShares ideas with Jason Bloom, Invesco Head of Fixed Income Strategy

BulletShares ETFs: Solution for challenging times

It’s challenging to be a bond investor in a volatile market and economic environment. Interest rate uncertainty, inflation pressure, geopolitical instability, and shifting economic growth forecasts are weighing on markets. Investors need income solutions that offer both clarity and control. BulletShares ETFs can be an intelligent, accessible solution for bond investors seeking to navigate uncertainty with precision and confidence. Their hold-to-maturity strategy can help them craft a sleeve of visibility during times of high uncertainty.

Consider shorter duration high yield bonds and longer duration investment grade corporate and municipal bonds 

My team spends a lot of time identifying favorable risk/reward bond opportunities. In these challenging times, we believe shorter duration high yield bonds and longer duration investment grade corporate and municipal bonds can make sense. Yes, duration hasn’t been US investor’s friend the past several years when interest rates rose quickly because of high inflation and expanding federal deficits. And, unfortunately, it also isn’t working now, amidst the market downturns triggered by volatility in US trade policy.

But a steepening US yield curve creates an opportunity bond investors haven’t seen in many years — the chance for meaningfully higher yields in longer maturity investment grade bonds than those offered at the shorter end of the yield curve. Of course, a challenge with longer maturities is that they're longer duration exposes them to higher price volatility and larger potential losses if not held to maturity. That’s where BulletShares shine.They offer the opportunity to lock in those higher long-term yields with the confidence of a hold-to-maturity strategy. An investor won't be forced to sell bonds at losses should interest rates spike higher and bond prices decline during market volatility. 

Maturing BulletShares? Consider

• BSJT - Invesco BulletShares 2029 High Yield Corporate Bond ETF
• BSMY Invesco BulletShares 2034 Municipal Bond ETF

If you have maturing BulletShares ETFs, consider BSJT for a high yield opportunity with a moderate duration. At the long end of the yield curve, consider BSMY for potentially attractive yields in the investment grade municipal space.
Learn more about BulletShares ETFs maturity process and how to use our ETFs to diversify below this video.

*Diversification does not guarantee a profit or eliminate the risk of loss.

Important Information

Not a Deposit    Not FDIC Insured    Not Guaranteed by the Bank    May Lose Value    Not Insured by any Federal Government Agency

This does not constitute a recommendation of any investment strategy or product for a particular investor. Investors should consult a financial professional before making any investment decisions.

The opinions expressed are those of Invesco, are based on current market conditions and are subject to change without notice. These opinions may differ from those of other Invesco investment professionals.

There are risks involved with investing in ETFs, including possible loss of money. Shares are not actively managed and are subject to risks similar to those of stocks, including those regarding short selling and margin maintenance requirements. Ordinary brokerage commissions apply. The Fund's return may not match the return of the Underlying Index. The Fund is subject to certain other risks. Please see the current prospectus for more information regarding the risk associated with an investment in the Fund.

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 10,000, 20,000, 25,000, 50,000, 75,000, 80,000, 100,000, or 150,000 Shares.

BSMY

Investments focused in a particular industry or sector are subject to greater risk, and are more greatly impacted by market volatility, than more diversified investments.

The Fund is non-diversified and may experience greater volatility than a more diversified investment.

Interest rate risk refers to the risk that bond prices generally fall as interest rates rise and vice versa.

During the final year of the Fund's operations, as the bonds mature and the portfolio transitions to cash and cash equivalents, the Fund's yield will generally tend to move toward the yield of cash and cash equivalents and thus may be lower than the yields of the bonds previously held by the Fund and/or bonds in the market.

An issuer may be unable or unwilling to meet interest and/or principal payments, thereby causing its instruments to decrease in value and lowering the issuer's credit rating.

Income generated from the Fund is based primarily on prevailing interest rates, which can vary widely over the short- and long-term. If interest rates drop, the Fund's income may drop as well.

During periods of rising interest rates, an issuer may exercise its right to pay principal on an obligation later than expected, resulting in a decrease in the value of the obligation and in a decline in the Fund's income.

An issuer's ability to prepay principal prior to maturity can limit the Fund's potential gains. Prepayments may require the Fund to replace the loan or debt security with a lower yielding security, adversely affecting the Fund's yield.

The Fund currently intends to effect creations and redemptions principally for cash, rather than principally in-kind because of the nature of the Fund's investments. As such, investments in the Fund may be less tax efficient than investments in ETFs that create and redeem in-kind.

Unlike a direct investment in bonds, the Fund's income distributions will vary over time and the breakdown of returns between Fund distributions and liquidation proceeds are not predictable at the time of investment. For example, at times the Fund may make distributions at a greater (or lesser) rate than the coupon payments received, which will result in the Fund returning a lesser (or greater) amount on liquidation than would otherwise be the case. The rate of Fund distribution payments may affect the tax characterization of returns, and the amount received as liquidation proceeds upon Fund termination may result in a gain or loss for tax purposes.

During periods of reduced market liquidity or in the absence of readily available market quotations for the holdings of the Fund, the ability of the Fund to value its holdings becomes more difficult and the judgment of the Sub-Adviser may play a greater role in the valuation of the Fund's holdings due to reduced availability of reliable objective pricing data.

The Fund’s use of a representative sampling approach will result in its holding a smaller number of securities than are in the underlying Index, and may be subject to greater volatility.

An issuer’s ability to prepay principal prior to maturity can limit the funds’ potential gains. Prepayments may require the funds to replace the loan or debt security with a lower yielding security, adversely affecting the funds’ yield.

Municipal securities are subject to the risk that legislative or economic conditions could affect an issuer’s ability to make payments of principal and/ or interest.

There is no guarantee that the Fund's income will be exempt from federal and state income taxes. The Fund invests a substantial portion of its assets in New York (NY) municipal securities, and will have greater exposure to negative political, economic, regulatory or other factors within the state. Unfavorable developments in any economic sector may have a substantial impact on the overall NY municipal market. Certain issuers of NY municipal bonds have experienced serious financial difficulties in the past, and reoccurrence of these difficulties may impair the ability of such issuers to pay principal or interest on their obligations.

BSJT

If interest rates fall, it is possible that issuers of callable securities will call or prepay their securities before maturity, causing the Fund to reinvest proceeds in securities bearing lower interest rates and reducing the Fund’s income and distributions.

Reinvestment risk is the risk that a bond’s cash flows (coupon income and principal repayment) will be reinvested at an interest rate below that on the original bond.

The Fund may hold illiquid securities that it may be unable to sell at the preferred time or price and could lose its entire investment in such securities.

The values of junk bonds fluctuate more than those of high quality bonds and can decline significantly over short time periods.

The Fund may invest in privately issued securities, including 144A securities which are restricted (i.e. not publicly traded). The liquidity market for Rule 144A securities may vary, as a result, delay or difficulty in selling such securities may result in a loss to the Fund.

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