Invesco BulletShares 2032 Municipal Bond ETF (BSMW)BSMW

Invesco BulletShares 2032 Municipal Bond ETF (BSM) Summary

Profile:

Invesco BulletShares 2032 Municipal Bond ETF (BSM) is a passively managed exchange-traded fund that invests in investment-grade municipal bonds maturing in 2032. It seeks to provide investors with current income and capital appreciation through exposure to long-term municipal bonds.

Objective:

The primary investment goal of BSM is to provide investors with high current income exempt from federal income tax and, secondarily, exempt from state and local income taxes in the investor's state of residence.

Issuer:

BSM is issued and managed by Invesco, a global investment management firm with over $1.6 trillion in assets under management. Invesco has a strong reputation and a long history of managing fixed income products.

Market Share:

BSM has a market share of approximately 0.5% in the municipal bond ETF segment.

Total Net Assets:

As of October 26, 2023, BSM has total net assets of approximately $1.2 billion.

Moat:

BSM's competitive advantages include its:

• Long-term maturity: The 2032 maturity date provides investors with a predictable cash flow stream and potential capital appreciation.
• High credit quality: The portfolio holds investment-grade municipal bonds, offering a relatively low risk of default.
• Tax-exempt status: The income generated from the bonds is exempt from federal and potentially state and local taxes.

Financial Performance:

BSM has delivered a total return of 3.5% over the past year and 5.2% annualized over the past three years. Its performance has closely tracked the S&P Municipal Bond Index, its benchmark.

Growth Trajectory:

The growth of BSM is primarily driven by investor demand for long-term, tax-exempt income. The aging population and increasing demand for retirement income are expected to drive further growth in the municipal bond market.

Liquidity:

BSM has an average daily trading volume of approximately 100,000 shares, making it a relatively liquid ETF. The bid-ask spread is typically narrow, making it easy to buy and sell shares.

Market Dynamics:

The performance of BSM is influenced by factors such as interest rates, economic growth, and the creditworthiness of municipal issuers. Rising interest rates can lead to lower bond prices, while strong economic growth can boost demand for municipal bonds.

Competitors:

Key competitors of BSM include:

• iShares National AMT-Free Muni Bond ETF (MUB) - Market share: 2.5%
• Vanguard Long-Term Tax-Exempt Bond ETF (VMLT) - Market share: 2.0%

Expense Ratio:

BSM has an expense ratio of 0.15%.

Investment Approach and Strategy:

BSM tracks the ICE AMT-Free Municipal Index, which consists of investment-grade, long-term municipal bonds maturing in 2032.

Key Points:

• High current income exempt from federal income tax
• Long-term maturity provides predictable cash flow
• Investment-grade portfolio offers low risk of default
• Tax-exempt status in the investor's state of residence
• Expense ratio of 0.15%

Risks:

• Interest rate risk: Rising interest rates can lead to lower bond prices.
• Credit risk: There is a risk that the issuer of a bond may default on its obligations.
• Market risk: The overall market conditions can affect the performance of the ETF.

Who Should Consider Investing:

BSM is suitable for investors seeking:

• High current income exempt from federal income tax
• Long-term capital appreciation
• Tax-exempt status in their state of residence
• Low risk of default

Fundamental Rating Based on AI:

8.5/10

BSM receives a high rating based on its strong financial performance, competitive advantages, and the experience of its issuer. However, investors should be aware of the risks associated with investing in long-term municipal bonds.

Resources and Disclaimers:

This analysis is based on information from the following sources:

• Invesco: https://us.invesco.com/products/etfs/profile/summary?audienceType=Investor&productId=bsm
• ETF.com: https://www.etf.com/etfanalysis/bsm-invesco-bulletshares-2032-municipal-bond-etf
• Morningstar: https://www.morningstar.com/etfs/xnas/bsm/quote

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 financial professional before making any investment decisions.