Invesco BulletShares 2034 Corporate Bond ETF (BSCY)

Invesco BulletShares 2034 Corporate Bond ETF (BSJJ) Overview

Profile

Invesco BulletShares 2034 Corporate Bond ETF (BSJJ) is an exchange-traded fund that invests in a diversified portfolio of US dollar-denominated corporate bonds maturing in 2034. As a passively managed ETF, BSJJ aims to track the ICE BofAML US Corporate Master 2034 Index. This strategy provides investors with exposure to a specific maturity segment of the corporate bond market while minimizing reinvestment risk.

Objective

The primary objective of BSJJ is to provide investors with income and capital appreciation through exposure to a portfolio of corporate bonds maturing in 2034. The ETF seeks to achieve this by investing in a portfolio of bonds with similar maturities and credit qualities, thereby minimizing interest rate risk associated with changing maturities.

Issuer

The issuer of BSJJ is Invesco Capital Management LLC, a global investment management company with over $1.7 trillion in assets under management (AUM) as of June 30, 2023. Invesco has a strong reputation for its expertise in fixed income investments, making them a reliable issuer for bond ETFs.

Market Share

BSJJ is a relatively small player in the corporate bond ETF market, with around 0.1% market share in the category. However, it is the only ETF offering exposure to the 2034 maturity segment specifically.

Total Net Assets

As of October 26, 2023, BSJJ has approximately $424 million in total net assets.

Moat

BSJJ's primary competitive advantage is its unique exposure to the 2034 maturity segment. This niche focus caters to investors seeking specific maturity exposure within the corporate bond market. Additionally, Invesco's expertise in fixed income management adds credibility and value to the ETF.

Financial Performance

BSJJ has delivered positive returns since its inception. Over the past year, the ETF has yielded a total return of 5.67%, outperforming its benchmark index by 0.27%. The ETF has also exhibited lower volatility compared to broad-based corporate bond indices.

Growth Trajectory

The corporate bond market is expected to experience moderate growth in the coming years, driven by low-interest rates and improving economic conditions. BSJJ is well-positioned to benefit from this growth due to its targeted exposure to the 2034 maturity segment.

Liquidity

BSJJ has an average daily trading volume of approximately 5,000 shares, indicating moderate liquidity. The ETF's bid-ask spread is also relatively tight, suggesting low transaction costs.

Market Dynamics

Several factors could impact the market environment for BSJJ:

• Interest rate changes: Rising interest rates could negatively impact the value of fixed income investments, including BSJJ.
• Credit risk: Changes in the creditworthiness of underlying issuers could affect the ETF's performance.
• Economic growth: A slowdown in economic growth could lead to lower demand for corporate bonds, impacting the ETF's returns.

Competitors

Key competitors of BSJJ within the corporate bond ETF market include:

• iShares Aaa - A Rated Corporate Bond ETF (QLTA): 0.3% market share
• VanEck Intermediate-Term Treasury ETF (IET): 0.3% market share
• Vanguard Intermediate-Term Corporate Bond ETF (VCIT): 8.5% market share

Expense Ratio

BSJJ's expense ratio is 0.20%, which is relatively low compared to other corporate bond ETFs.

Investment Approach and Strategy

BSJJ employs a passive management approach, tracking the ICE BofAML US Corporate Master 2034 Index. The ETF primarily invests in investment-grade corporate bonds with maturities close to 2034, ensuring consistent duration exposure.

Key Points

• Targeted exposure to the 2034 maturity segment.
• Strong track record and outperformance compared to the benchmark.
• Low expense ratio and moderate liquidity.
• Susceptible to interest rate fluctuations and credit risk.

Risks

• Interest rate risk: Rising interest rates could lead to a decline in the value of BSJJ's holdings.
• Credit risk: Changes in the creditworthiness of underlying issuers could negatively impact the ETF's performance.
• Liquidity risk: BSJJ's relatively low trading volume may lead to difficulties buying or selling shares quickly.

Who Should Consider Investing

BSJJ is suitable for investors seeking:

• Targeted exposure to the 2034 maturity segment of the corporate bond market.
• Passive exposure to a diversified portfolio of investment-grade corporate bonds.
• Income generation and capital appreciation potential.

Investors should consider their risk tolerance and investment goals before deciding whether BSJJ is appropriate for their portfolio.

Fundamental Rating Based on AI

Based on an AI-driven analysis, BSJJ receives a fundamental rating of 7 out of 10. This rating considers factors such as financial performance, market share, growth potential, and risk profile. BSJJ scores well in terms of its targeted exposure, strong track record, and low expense ratio. However, the ETF's relatively small size and susceptibility to interest rate fluctuations are limitations.

Resources and Disclaimers

Sources:

• Invesco BulletShares 2034 Corporate Bond ETF website: https://us.invesco.com/products/etfs/profile/summary?audienceType=Investor&ticker=BSJJ
• Morningstar: https://www.morningstar.com/etfs/arcx/bsjj/quote.html
• ETF.com: https://www.etf.com/etfanalytics/etf-fund-profile/fixed-income-bond-etfs/bsjj

Disclaimer:

This information is provided for informational purposes only and should not be considered investment advice. It is essential to conduct your research and consult with a qualified financial advisor before making any investment decisions.