ETFs
Invesco launches ‘BulletShares’ corporate bond ETFs in Europe | ETF Strategy
Invesco began to present his ‘Bullet Shares‘ Fixed maturity ETF in Europe, providing exposure to portfolios of bonds maturing in a specific year.
Paul Syms, Head of EMEA Fixed Income and Commodities ETF Product Management at Invesco.
Unlike traditional fixed income ETFs that frequently rotate bonds to maintain specific maturity profiles, BulletShares ETFs hold their underlying bonds until maturity, at which point the funds are liquidated.
They provide monthly income streams as well as a final cash distribution, thereby mimicking the characteristics of individual bonds. Additionally, these funds offer the benefits of increased liquidity and reduced specific risk to the issuer due to the diversified nature of the ETF structure.
Investors have the flexibility to tailor their portfolios with these funds to align with anticipated future cash flow needs, using ETFs with varying maturity dates.
Paul Syms, Head of EMEA Fixed Income and Commodities ETF Product Management at Invesco, commented: “Investors can use our BulletShares ETFs for longer-term financial planning because This is called the staggering of obligations. This strategy typically involves investing in a range of fixed-maturity ETFs and, as each ETF matures, the investor rolls the proceeds into the next one launched. This would provide a more predictable income that could be received by the investor on a quarterly basis or automatically accumulated in the fund.
Gary Buxton, Head of ETFs and Index Strategies EMEA at Invesco, added: “Institutional investors often employ a strategy where they construct a bond portfolio that produces an income stream that closely matches their commitments. Our new BulletShares range gives all investors the tools to create a similar strategy, but with the added benefits of greater diversification and the transparency and trading efficiency of an ETF structure. These ETFs could help pension funds meet their liabilities, but would also provide a simple and inexpensive solution for parents needing to plan for school fees or for those saving for a home.
Invesco’s initial BulletShares offering includes five ETFs targeting maturities from 2026 to 2030. Each ETF follows a Bloomberg Target Maturity USD Corporate Bond Screened Indexcomposed of investment grade, fixed rate, taxable corporate bonds denominated in US dollars, globally.
To be eligible for inclusion, bonds must have a minimum face amount of $300 million and a maturity date aligned with the index’s target year. Additionally, bonds issued by companies engaged in controversial activities or facing significant ESG-related controversies are excluded.
These ETFs are available on the London Stock Exchange in USD and GBP, the Euronext Milan in EUR, and on the Swiss Stock Exchange SIX in CHF, with capitalization and distribution share classes offered. The rest is detailed as follows:
Invesco BulletShares 2026 USD Corporate Bond UCITS ETF (See : BS6A LN; Dist. : BU26 LN)
Invesco BulletShares 2027 USD Corporate Bond UCITS ETF (See : BS7A LN; Dist. : BS27 LN)
Invesco BulletShares 2028 USD Corporate Bond UCITS ETF (See : BS8A LN; Dist. : BS28 LN)
Invesco BulletShares 2029 USD Corporate Bond UCITS ETF (See : BS9A LN; Dist. : BS29 LN)
Invesco BulletShares 2030 USD Corporate Bond UCITS ETF (See : BS0A LN; Dist. : BS30 LN)
The expense ratio for each ETF is set at 0.10%.