Investment manager Invesco has expanded its range of BulletShares Ucits ETFs by launching five new Euro-denominated investment-grade corporate bond funds.
According to the firm, these fixed-maturity products offer the benefits of investing in individual bonds, along with the diversification, low cost, transparency and liquidity of an ETF. Investors will have options for maturity dates ranging from 2026 to 2030, with both accumulating and distributing shares available for each ETF.
Amundi launches “lowest cost” all country Ucits ETF
These new Euro denominated funds mirror Invesco’s existing USD range. Gary Buxton, head of Emea ETFs and indexed strategies at Invesco, said: “Fixed-maturity ETFs can help investors meet various goals, from aligning cash flow with future liabilities to filling maturity gaps in their bond portfolio. Strategies once exclusive to large institutions can now be accessed by other investors through our simple BulletShares ETFs.”
Each ETF aims to deliver the performance of its reference Bloomberg index, which reflects the performance of Euro denominated, investment-grade, fixed-rate, taxable corporate debt securities. To be included, securities must have a minimum par amount of €300 million outstanding and an effective maturity within the final year of the ETF’s fixed maturity date. Issuers involved in controversial business activities or with severe ESG-related issues are excluded from the index.
Franklin Templeton launches five year fixed maturity bond fund
Invesco’s portfolio managers will use a sampling strategy to select a representative portion of the index, ensuring that the ETF reflects its characteristics accurately. As corporate bonds held by the fund reach maturity, proceeds will be reinvested in short-dated government-issued debt. The spokesperson added, “These precision tools could help pension funds match their liabilities but equally provide a simple, low-cost solution for parents needing to plan for school fees or someone saving for a house purchase.”
These ETFs offer a practical solution for long-term financial planning through bond laddering, a strategy involving investment in a series of fixed-maturity ETFs. Paul Syms, head of Emea fixed income and commodity ETF product management at Invesco, said: “Investors can use our BulletShares ETFs for longer-term financial planning through what’s known as bond laddering. As each ETF reaches maturity, investors can roll the proceeds into the next ETF with a later maturity date, providing a predictable income stream that can be either taken quarterly or automatically accumulated within the fund.”
