Invesco BulletShares (R) 2028 Municipal Bond ETF (BSMS)

Invesco BulletShares (R) 2028 Municipal Bond ETF (BSMN)

Profile:

Invesco BulletShares (R) 2028 Municipal Bond ETF is a passively managed exchange-traded fund (ETF) that invests primarily in high-quality municipal bonds maturing in 2028. The fund seeks to provide investors with current income and capital appreciation through exposure to these bonds. BSMN is suitable for investors seeking a fixed-income investment with a specific maturity date and tax-exempt income.

Objective:

The primary investment goal of BSMN is to track the performance of the ICE BofAML US AMT-Free Municipal 2028 Index, which includes high-quality municipal bonds with maturities in 2028.

Issuer:

Invesco Ltd. (IVZ) is the issuer of BSMN. Invesco is a global asset management company with over $1.6 trillion in assets under management. The company has a strong reputation and track record in the market, with a long history of managing fixed-income investments.

Market Share:

BSMN has a market share of approximately 0.3% in the municipal bond ETF market. This places it as a relatively small player in the market, but its specific maturity focus appeals to investors with precise investment goals.

Total Net Assets:

As of November 3, 2023, BSMN has total net assets of approximately $527 million.

Moat:

The competitive advantage of BSMN lies in its specific maturity focus. This caters to investors seeking exposure to bonds maturing in 2028, offering a solution for portfolio laddering or managing specific liabilities.

Financial Performance:

BSMN has delivered a total return of 3.5% since its inception in 2018. Recently, its performance has been impacted by rising interest rates, leading to a negative return in 2023.

Benchmark Comparison:

BSMN has closely tracked the performance of its benchmark index, the ICE BofAML US AMT-Free Municipal 2028 Index. This indicates the fund's effectiveness in replicating the target market.

Growth Trajectory:

The growth of BSMN is likely to be tied to the overall demand for municipal bond ETFs and the specific demand for bonds maturing in 2028. The market for short-term municipal bonds is expected to experience moderate growth in the coming years.

Liquidity:

BSMN has an average trading volume of approximately 17,000 shares per day. This indicates moderate liquidity, which may impact bid-ask spreads and transaction costs.

Market Dynamics:

Factors affecting BSMN's market environment include interest rate changes, economic growth, and municipal bond issuance. Rising interest rates can negatively impact bond prices, while economic growth and increased municipal bond issuance can positively affect the market.

Competitors:

Key competitors of BSMN include:

• iShares National AMT-Free Muni Bond ETF (MUB) with a market share of 2.5%
• SPDR Nuveen Barclays Short Term Municipal Bond ETF (SHM) with a market share of 1.8%
• VanEck Merk Short Duration Municipal Bond ETF (MES) with a market share of 1.5%

Expense Ratio:

BSMN has an expense ratio of 0.15%, which is considered low compared to other similar ETFs.

Investment Strategy:

BSMN employs a passive investment strategy, aiming to track the ICE BofAML US AMT-Free Municipal 2028 Index. The fund holds a diversified portfolio of high-quality municipal bonds with maturities in 2028.

Key Points:

• Specific maturity focus on bonds maturing in 2028
• Low expense ratio
• Passive management style
• Tax-exempt income potential

Risks:

• Interest rate risk: Rising interest rates can negatively impact BSMN's market value.
• Credit risk: The creditworthiness of individual bond issuers can affect the fund's performance.
• Liquidity risk: BSMN's moderate liquidity may lead to wider bid-ask spreads and higher transaction costs.

Who Should Consider Investing:

BSMN is suitable for investors seeking:

• Tax-exempt income
• Exposure to high-quality municipal bonds
• A specific maturity date of 2028
• Low investment costs

Fundamental Rating Based on AI:

Using an AI-based rating system, BSMN receives a 7 out of 10. This rating considers the fund's financial health, market position, and future prospects. The AI analysis highlights the fund's low expense ratio, diversified portfolio, and specific maturity focus as strengths. However, the moderate market share and recent negative performance are identified as areas for improvement.

Resources:

• Invesco BulletShares (R) 2028 Municipal Bond ETF (BSMN) website: https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&productId=BSMN
• ICE BofAML US AMT-Free Municipal 2028 Index: https://www.bofa.com/en-us/insights/market-commentary/fixed-income-market-commentary/ice-bofa-ml-us-amt-free-municipal-2028-index.html

Disclaimer:

This information is for educational purposes only and should not be considered financial advice. Please consult with a financial professional before making any investment decisions.