Invesco Launches a Laddered Series of Fixed Maturity Fixed Income ETFs
31 MAY, 2024
By Jose Luis Palmer from RankiaPro Europe
Invesco continues to expand its financial product offerings with the launch of a series of fixed maturity and laddered fixed income ETFs. These new ETFs are aimed at investors seeking to capitalize on current high yields and tailor the maturity profile or income stream of their portfolios.
Details of the New Funds
The new range of Invesco products offers exposure to investment-grade corporate bonds denominated in US dollars, with maturity dates ranging from 2026 to 2030. The initial offering includes the following funds:
- Invesco BulletShares 2026 USD Corporate Bond UCITS ETF
- Invesco BulletShares 2027 USD Corporate Bond UCITS ETF
- Invesco BulletShares 2028 USD Corporate Bond UCITS ETF
- Invesco BulletShares 2029 USD Corporate Bond UCITS ETF
- Invesco BulletShares 2030 USD Corporate Bond UCITS ETF
We want to offer a range of ETFs that mature like bonds and help investors build their portfolios effectively and diversely, making their planning more predictable. With an annual cost of 0.1%, these ETFs offer potential investment solutions for both professional investors—such as pension funds with fixed-term obligations—and individual investors—such as parents needing to plan for school fees or people saving for a house.
Laure Peyranne, Head of ETFs and Indexed Strategies for Iberia, Latin America, and US Offshore at Invesco
Operation and Strategy of BulletShares
Each Invesco BulletShares ETF will seek to replicate the performance of its Bloomberg benchmark index, designed to reflect the performance of fixed-rate taxable debt securities of investment-grade corporate issuers denominated in dollars. The securities must have a minimum outstanding principal of $300 million and an effective maturity date within the final year of the ETF’s fixed maturity date.
For example, the Invesco BulletShares 2026 USD Corporate Bond UCITS ETF aims to replicate the performance of the Bloomberg 2026 Maturity USD Corporate Bond Screened Index, where each bond has a maturity date between January 1, 2026, and December 31, 2026.
Peyranne explained that investors can use the new BulletShares ETFs for long-term financial planning through the bond laddering strategy.
This strategy involves investing in a series of fixed maturity ETFs—for example, in each of the ETFs that make up our current set, maturing between 2026 and 2030—and, as each ETF matures, the investor reallocates the capital to the next ETF launched, in this case, one with a maturity date in 2031. This would offer more predictable income that the investor could collect quarterly or automatically accumulate in the fund.
Laure Peyranne, Head of ETFs and Indexed Strategies for Iberia, Latin America, and US Offshore at Invesco
With this new offering, Invesco positions itself to help investors manage their portfolios more efficiently and predictably, adapting to long-term financial planning needs and taking advantage of opportunities in the fixed income market.
