INVESCO ETFS BulletShares® bond portfolios

BulletShares are a suite of defined maturity exchange-traded funds (ETFs) designed to help investors build targeted fixed income portfolios. Each fund holds a diversified basket of bonds that all mature in the same calendar year, helping investors target specific maturity timelines, risk preferences, and investment objectives. By combining the precision of individual bonds with the structural benefits of ETFs, BulletShares offer diversification, transparency, and liquidity. The funds typically distribute income monthly.

A bond ladder is built with individual bonds of varying maturities. As the bonds mature, the anticipated proceeds can be used for income needs or reinvested in new bonds that mature in subsequent years. Investors may use bond ladders to help create some predictability and stability regardless of market volatility and interest rate environments. Since they have specific maturity dates, investors can use BulletShares to build bond ladders without the time and expense of using individual bonds.

BulletShares can provide investors with an efficient way to establish potential protection from rising rates because the duration of the fund slowly rolls down to zero over the life of the ETF. Most traditional fixed income mutual funds and ETFs typically have a perpetual duration target, making them more sensitive to rising interest rates. Investors using BulletShares in bond ladders can also take advantage of rising interest rates by reinvesting the proceeds at maturity into BulletShares that mature in subsequent years and invest in bonds with higher interest rates.

BulletShares provide targeted exposure to investment-grade corporate bonds, high-yield corporate bonds, corporate bonds, municipal bonds and treasury bonds.

BulletShares have defined maturities to simulate the investor experience of buying and holding individual bonds to maturity for use in bond ladders and other strategies. BulletShares have designated years of maturities that are included in the fund’s name. Each BulletShares  is designed to terminate in December of the designated year and make a final distribution at maturity. At each fund’s expected termination, the net asset value (NAV) of its assets is distributed to investors without any action on their part.

As BulletShares approach maturity, their durations decrease. In the last six months of the ETF’s maturity year, it is anticipated that the bonds in the portfolio will either mature or be called. Proceeds for these events will then be held either in cash or in cash equivalents such as US Treasury bills or commercial paper.

As your BulletShares mature, you may want to consult with an investment professional and explore having the distribution proceeds invested in a BulletShares ETF in a subsequent maturity year.