Invesco has introduced a range of fixed maturity ETFs aimed at investors seeking to benefit from current high yields while tailoring their portfolio’s maturity profile or income stream.
The initial offerings provide exposure to USD-denominated investment-grade corporate bonds with maturity dates from 2026 to 2030. Both accumulating and distributing shares are available for each ETF.
The new ETFs include 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 and Invesco BulletShares 2030 USD Corporate Bond Ucits ETF.
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Paul Syms, head of Emea fixed income and commodity ETF product management at Invesco, said: “Investors can use our ETFs for longer-term financial planning through bond laddering. This strategy typically involves investing in a range of fixed-maturity ETFs, and as each ETF reaches maturity, the investor rolls the proceeds into the next one launched. This would provide predictable income to either be taken by the investor quarterly or be automatically accumulated within the fund.”
Each ETF aims to replicate the performance of its respective Bloomberg index, reflecting USD-denominated, investment-grade, fixed-rate, taxable corporate debt securities. To qualify, securities must have a minimum of $300 million par amount outstanding and an effective maturity within the ETF’s specified year.
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The asset manager has shared that issuers involved in controversial business activities or those with ESG-related controversies will be excluded from the indices. Upon maturity of a corporate bond, proceeds will be reinvested in short-dated US Treasury debt.
Gary Buxton, head of Emea ETFs and indexed strategies at Invesco, said: “Institutional investors often employ a strategy where they build a portfolio of bonds that produces an income stream that closely matches their liabilities. Our new BulletShares range offers 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 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.”
