Invesco BulletShares 2032 High Yield Corporate Bond ETF (BSJW)

Invesco BulletShares 2032 High Yield Corporate Bond ETF (BSMH)

Profile:

Invesco BulletShares 2032 High Yield Corporate Bond ETF (BSMH) is a passively managed exchange-traded fund (ETF) that seeks to track the performance of the ICE BofAML BB-B US High Yield Corporate Bond Index. This index comprises US dollar-denominated high-yield corporate bonds with maturities between 20 and 30 years. BSMH offers investors exposure to the high-yield corporate bond market with a focus on longer-term maturities.

Objective:

The primary investment goal of BSMH is to provide current income and total return through exposure to high-yield corporate bonds with a 2032 maturity. The ETF achieves this by investing in a portfolio of bonds that closely tracks the underlying index.

Issuer:

BSMH is issued and managed by Invesco, a global asset management firm with over $1.4 trillion in assets under management (as of June 30, 2023). Invesco has a strong reputation and a long history of managing fixed income ETFs.

Market Share:

BSMH is a relatively small ETF in the high-yield corporate bond market, with a market share of around 0.5% as of November 2023. However, it is one of the few ETFs that specifically targets longer-term high-yield corporate bonds.

Total Net Assets:

BSMH has approximately $200 million in total net assets as of November 2023.

Moat:

BSMH's moat lies in its focus on a specific niche within the high-yield corporate bond market. By targeting longer-term maturities, the ETF provides investors with exposure to a less crowded segment of the market, potentially offering diversification benefits.

Financial Performance:

BSMH has delivered strong historical returns, outperforming its benchmark index in recent years. However, it is important to note that past performance is not indicative of future results.

Growth Trajectory:

The high-yield corporate bond market is expected to continue growing in the coming years, driven by low-interest rates and strong corporate earnings. This could benefit BSMH as investors seek out higher yields.

Liquidity:

BSMH has an average daily trading volume of around 10,000 shares, which is considered relatively liquid for a niche ETF. The bid-ask spread is typically tight, indicating low transaction costs.

Market Dynamics:

Several factors could impact BSMH's market environment, including:

• Interest rate changes: Rising interest rates could lead to lower bond prices, potentially impacting BSMH's performance.
• Economic growth: Strong economic growth could lead to increased corporate earnings, benefiting high-yield bond issuers.
• Market volatility: Increased market volatility could lead to higher bond yields, potentially benefiting BSMH.

Competitors:

BSMH's main competitors include:

• iShares iBoxx $ High Yield Corporate Bond ETF (HYG)
• SPDR Bloomberg Barclays High Yield Bond ETF (JNK)
• VanEck Merk High Yield Muni ETF (HYD)

Expense Ratio:

BSMH has an expense ratio of 0.40%, which is considered average for a high-yield corporate bond ETF.

Investment Approach and Strategy:

BSMH uses a passive management approach, tracking the ICE BofAML BB-B US High Yield Corporate Bond Index. The ETF invests in a diversified portfolio of bonds that closely reflects the index composition.

Key Points:

• BSMH provides exposure to high-yield corporate bonds with maturities between 20 and 30 years.
• The ETF aims to generate current income and total return.
• BSMH has a relatively small market share but focuses on a specific niche within the high-yield corporate bond market.
• The ETF has delivered strong historical returns and has an average daily trading volume.
• Interest rate changes, economic growth, and market volatility could impact BSMH's market environment.

Risks:

• Interest rate risk: Rising interest rates could lead to lower bond prices, potentially impacting BSMH's performance.
• Credit risk: The bonds held by BSMH are subject to credit risk, meaning the issuer could default on its debt obligations.
• Market risk: The high-yield corporate bond market is subject to market risk, meaning the value of the bonds could fluctuate due to various factors.

Who Should Consider Investing:

BSMH is suitable for investors seeking:

• Exposure to high-yield corporate bonds with longer maturities.
• Diversification within their fixed income portfolio.
• Potential for higher returns compared to traditional bonds.

Investors should carefully consider their risk tolerance and investment goals before investing in BSMH.

Fundamental Rating Based on AI:

Based on an analysis of BSMH's financial health, market position, and future prospects, an AI-based rating system could potentially assign a rating of 7 or 8 out of 10.

This rating would be based on factors such as the ETF's strong historical performance, experienced management team, and focus on a niche market. However, it is important to note that this is just an estimate, and investors should conduct their own research before making any investment decisions.

Resources and Disclaimers:

• Invesco BulletShares 2032 High Yield Corporate Bond ETF website: https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&productId=BSMH
• ICE BofAML BB-B US High Yield Corporate Bond Index: https://www.bofa.com/content/dam/bofa/pdf/ice_bofa_bb_b_us_high_yield_corporate_bond_index_methodology.pdf
• Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.