Bullet for my Guggenheim

USA

Invesco expands BulletShares line to include Municipal

When Invesco bought out Guggenheim’s ETF busines for $1.2bn last year there were two jewels in the crown: The $20bn equally weighted S&P 500 tracker (RSP), and the $10bn BulletShares ETF – a family of bond ETFs with bullet maturity. The original BulletShares ETFs covered only high yield and investment grade corporate. But now Invesco is building out the family to include US municipal bonds.

  • Invesco BulletShares 2021 Municipal Bond ETF         (BSAE)
  • Invesco BulletShares 2022 Municipal Bond ETF         (BSBE)
  • Invesco BulletShares 2023 Municipal Bond ETF         (BSCE)
  • Invesco BulletShares 2024 Municipal Bond ETF         (BSDE)

Th new funds will track Nasdaq indexes that cover the tax-exempt municipal bond market, the overwhelming majority of which is investment grade.

Analysis – great products

ETFs with bullet maturity (whether iShares iBonds, or Invesco’s BulletShares) marry the best of an ETF: open-ended and trades on exchange intraday. With the best of a bond: return of principal and interest by a set date. As such, they fill a real gap in the market, providing – in effect – liquid exchange-traded bonds with lower credit risk (as credit risk is spread over a basket of securities – not just one instrument, as when one owns a bond). They’re especially appealing in a rising rate environment because they allow an easy way to manage maturity. We expect these types of ETFs to gather more assets and grow in popularity.

 

London

iShares lists ESG versions of its EM bond funds

iShares is listing ESG versions of its legendary £5bn US dollar-denominated EM bond ETFs. The newly listed iShares JP Morgan ESG USD EM Bond UCITS ETF (EMES, EMSA) will track the JP Morgan ESG EMBI Global Diversified index, from the same family as its original EM bond ETFs.

The indexes have been developed in cooperation between JPMorgan and BlackRock, a press release indicates. The index removes “controversial sectors”: thermal coal, tobacco, weapons and any violator of the United Nations Global Compact principles.