Market Overview

Invesco Adds Two Defined Maturity Bond ETFs to its BulletShares Suite


Invesco Adds Two Defined Maturity Bond ETFs to its BulletShares Suite

New Corporate Bond ETF and High Yield Corporate ETF replace maturing Funds

PR Newswire

ATLANTA, Aug. 9, 2018 /PRNewswire/ -- Invesco Ltd. (NYSE:IVZ) a leading global provider of exchange-traded funds (ETFs), announced today the launch of two new BulletShares ETFs, the BulletShares 2028 Corporate Bond ETF (ARCA:BSCS) and the BulletShares 2026 High Yield Corporate Bond ETF (ARCA:BSJQ). The ETFs will be incorporated into the firm's BulletShares® Corporate Bond and BulletShares® High Yield Corporate Bond ETF portfolios, which provide defined maturity exposure through investment-grade corporate bonds in a transparent ETF wrapper.

Invesco Ltd. logo. (PRNewsFoto/Invesco, Chris Wilson)

BulletShares ETFs seek to combine the advantages of ETF investing, such as diversification1 and relatively low costs2, with the benefits of individual bonds, including the potential ability to match income with future cash-flow needs. Through this structure, BulletShares ETFs may offer income-seeking investors a unique and easily accessible means of building or managing a laddered income stream.

The two new ETFs offer investors a potential rollover product for the BulletShares® ETFs that will mature at the end of 20183. Similar to individual bonds, BulletShares offer the potential for monthly income and a cash distribution at the fund's termination4.

"The longer maturity date of the two new Invesco BulletShares ETFs will further democratize the bond laddering process for investors, offering a convenient and liquid way to meet the market for defined income needs," explained Dan Draper, Global Head of ETFs at Invesco. "Invesco is committed to accelerating growth in the BulletShares suite to provide even better value to existing and future shareholders of the decade-old product line. These new ETFs elevate the goal-oriented investment experience for smaller investors who may not necessarily have the ability to invest individual bond ladders."

With the inclusion of the two newly launched BulletShares ETFs, the full suite of funds now has defined years of maturity ranging from 2018 to 2028. Each ETF will terminate on December 31 of its respective maturity year. At termination, each fund will make a cash distribution to the then-current shareholders of its net assets5. The BulletShares ETF Suite is comprised of 10 Corporate Bond ETFs and eight High Yield Corporate Bond ETFs that each hold a portfolio of bonds that all mature in a target year. The BulletShares® family of ETFs invest in bonds with a minimum issuance size of $500 million, with an issuer cap of 5%. In the final six months leading up to final maturity, bonds held within the BulletShares ETFs will mature and proceeds will be reinvested in cash and cash equivalents. The new ETFs will track the Nasdaq BulletShares USD Corporate Bond 2028 Index and the Nasdaq BulletShares USD High Yield Corporate Bond 2026 Index, and will rebalance monthly.

Jason Bloom, Director of Global Macro ETF Strategy at Invesco, adds, "Using BulletShares as a means of holding bonds to maturity may help to insulate investors from the risk of rising rates, while further adding value by solving the headache of finding and trading individual bonds."

Invesco also offers the BulletShares®  ETF Bond Ladder Tool to provide a convenient way to build a hypothetical laddering strategy with BulletShares, based on maturity and credit criteria. The Tool uncovers specific BulletShares ETFs that enable an investor to build a customized fixed income portfolio tailored to a specific maturity profile, risk preference and investment goal. 

About Invesco Ltd.
Invesco is an independent investment management firm dedicated to delivering an investment experience that helps people get more out of life. NYSE: IVZ;

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, bond funds 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 advisers regarding their situation before investing.

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 funds' return may not match the return of the underlying index. The funds are subject to certain other risks. Please see the current prospectus for more information regarding the risk associated with an investment in the funds.

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

The funds are 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 funds' operations, as the bonds mature and the portfolio transitions to cash and cash equivalents, the funds' 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 funds 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.

The risks of investing in securities of foreign issuers can include fluctuations in foreign currencies, political and economic instability, and foreign taxation issues.

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

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.

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

Unlike a direct investment in bonds, the funds' 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 funds may make distributions at a greater (or lesser) rate than the coupon payments received, which will result in the funds 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.

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

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.

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.

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

Note: Not all products are available through all firms.

Not FDIC insured | May Lose Value | No Bank Guarantee

Before investing, investors should carefully read the prospectus/summary prospectus and carefully consider the investment objectives, risks, charges and expenses. For this and more complete information about the fund call 800.983.0903 or visit for the prospectus/summary prospectus.

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

2 Since ordinary brokerage commissions apply for each buy and sell transaction, frequent trading activity may increase the cost of ETFs.

3 Invesco BulletShares 2018 Corporate Bond ETF (BSCI) & Invesco BulletShares 2018 High Yield Corporate Bond ETF (BSJI)

4 The funds have designated years of maturity ranging from 2018 to 2028 and will terminate on or about December 31st of their respective maturity year. In connection with such termination, each fund will make a cash distribution to then current shareholders of its net assets after making appropriate provisions for any liabilities of the fund. The funds do not seek to return any predetermined amount at maturity. In the last six months when bonds held by the fund mature, the portfolio will transition to cash and cash equivalents, including without limitation US Treasury Bills and investment grade commercial paper. The funds will terminate without requiring additional approval by its board or shareholders. The Board may change the termination date to an earlier or later date without shareholder approval if determined the change to be in the best interest of the fund.

5 After making appropriate provisions for any liabilities of the ETF.

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SOURCE Invesco Ltd.

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