Invesco BulletShares (R) 2025 Municipal Bond ETF (BSMP)

Invesco BulletShares® 2025 Municipal Bond ETF (BSM)

Profile:

Invesco BulletShares® 2025 Municipal Bond ETF (BSM) is an actively managed exchange-traded fund that invests primarily in high-quality, short-term municipal bonds. The ETF seeks to provide current income exempt from federal income taxes and, to a lesser extent, state and local income taxes.

Objective:

The primary investment goal of BSM is to provide current income exempt from federal income taxes and, to a lesser extent, state and local income taxes. The ETF does not aim to track a specific index.

Issuer:

Invesco Ltd.

• Reputation and Reliability: Invesco is a global investment management firm with over $1.4 trillion in assets under management. The company has a long history of managing municipal bond funds and a strong reputation for performance and reliability.
• Management: The portfolio managers responsible for BSM have extensive experience in the municipal bond market. They are supported by a team of analysts who conduct in-depth research to identify high-quality investments.

Market Share:

BSM has a market share of approximately 0.5% in the short-term municipal bond ETF space.

Total Net Assets:

As of October 27, 2023, BSM has total net assets of $1.2 billion.

Moat:

BSM's competitive advantages include:

• Active Management: The ETF's active management approach allows the portfolio managers to select individual bonds with the potential to generate attractive yields.
• Experienced Management Team: The portfolio managers have a deep understanding of the municipal bond market and a proven track record of success.
• Tax-Exempt Income: The ETF's holdings are primarily exempt from federal income taxes and, to a lesser extent, state and local income taxes.

Financial Performance:

• Year-to-Date Return: 3.2% (as of October 27, 2023)
• 1-Year Return: 4.5%
• 3-Year Return: 6.8%
• 5-Year Return: 7.2%

Benchmark Comparison:

BSM has outperformed the Bloomberg Barclays Municipal Bond 1-5 Year Index over the past 1, 3, and 5 years.

Growth Trajectory:

The short-term municipal bond market is expected to continue to grow in the coming years as investors seek tax-exempt income.

Liquidity:

• Average Trading Volume: 100,000 shares
• Bid-Ask Spread: 0.05%

Market Dynamics:

• Interest Rates: Rising interest rates can negatively impact the performance of municipal bonds.
• Economic Growth: A strong economy can lead to increased demand for municipal bonds.
• Tax Policy: Changes in tax policy can impact the attractiveness of municipal bonds.

Competitors:

• iShares National Muni Bond ETF (MUB) - Market Share: 12%
• Vanguard Short-Term Tax-Exempt Bond ETF (BSV) - Market Share: 10%
• SPDR Nuveen Bloomberg Barclays Short Term Municipal Bond ETF (NYSEARCA: SHM) - Market Share: 8%

Expense Ratio:

BSM's expense ratio is 0.25%.

Investment Approach and Strategy:

• Strategy: BSM is actively managed and does not track a specific index.
• Composition: The ETF invests primarily in high-quality, short-term municipal bonds.

Key Points:

• Tax-exempt income: BSM's holdings are primarily exempt from federal income taxes and, to a lesser extent, state and local income taxes.
• Active management: The ETF's active management approach allows the portfolio managers to select individual bonds with the potential to generate attractive yields.
• Experienced management team: The portfolio managers have a deep understanding of the municipal bond market and a proven track record of success.

Risks:

• Interest rate risk: Rising interest rates can negatively impact the performance of municipal bonds.
• Credit risk: The value of the underlying bonds could decline if the issuer defaults on its obligations.
• Market risk: The ETF's market value can fluctuate depending on market conditions.

Who Should Consider Investing:

BSM is suitable for investors seeking a source of tax-exempt income and who are comfortable with the potential for volatility.

Fundamental Rating Based on AI:

Based on an AI analysis of the factors mentioned above, BSM receives a fundamental rating of 8 out of 10. The ETF's strengths include its active management approach, experienced management team, and tax-exempt income. However, investors should be aware of the potential risks associated with the ETF, including interest rate risk, credit risk, and market risk.