4 min readBy Beqa Bumbeishvili ETF Insider
How does the BSMM ETF work?
The BSMM ETF is a specialized investment fund that focuses on a specific sector. This exchange-traded fund offers investors exposure to a range of companies in this sector.
The BSMM ETF is managed by Invesco Indexing LLC, which is affiliated with Invesco Capital Management LLC, the fund's investment adviser, and Invesco Distributors, Inc., the fund's distributor. Invesco Indexing LLC compiles and maintains the Underlying Index, which the BSMM ETF aims to track. The Underlying Index seeks to measure the performance of a portfolio of U.S. dollar-denominated investment-grade municipal bonds with maturities or effective maturities in the year 2022. The BSMM ETF focuses on bonds that are exempt from federal income tax, pay fixed interest, and meet certain credit rating and face value criteria. It aims to provide investors with exposure to this specific segment of the municipal bond market. Please note that the BSMM ETF is set to terminate on or about December 15, 2022, and its investment strategy may evolve as it approaches maturity.
The BSMM Dividend ETF focuses on providing investors with exposure to a diversified portfolio of U.S. municipal bonds, particularly those with maturities in the year 2022. The ETF aims to replicate the performance of the underlying index, which consists of investment-grade municipal bonds exempt from federal income tax. Bonds held in the fund are generally held until maturity, call, or no longer meet the eligibility criteria of the index. Upon termination, the fund will make a cash distribution of its net assets to shareholders, with no predetermined cash distribution amount during the maturity year. Please note that the BSMM Dividend ETF is not a target date fund and utilizes a sampling methodology to achieve its investment objective.
The BSMM Tracking ETF is primarily designed to mirror the performance of the Underlying Index. Invesco Indexing LLC, the Index Provider, is responsible for compiling and maintaining the Underlying Index, with affiliations to Invesco Capital Management LLC and Invesco Distributors, Inc. This ETF focuses on U.S. dollar-denominated investment-grade municipal bonds set to mature in 2022, including those with embedded issuer call options. It seeks bonds exempt from federal income tax, paying fixed interest and meeting specific credit rating and face value criteria. BSMM Tracking aims to provide investors exposure to a diversified portfolio of 2022 Bonds and utilizes a sampling methodology to achieve its investment objective. The ETF is non-diversified, allowing for concentration in industries represented in the Underlying Index, as long as it aligns with the index's concentration. The Fund will terminate on or about December 15, 2022, with potential changes to the termination date at the discretion of the Board of Trustees.
The correlation aspect of the nvesco BulletShares 2022 Municipal Bond ETF (BSMM) is essential in understanding its behavior within the municipal bond market. As BSMM seeks to track a portfolio of U.S. dollar-denominated investment-grade municipal bonds with maturities primarily in 2022, its correlation with interest rate movements and municipal bond performance is of particular interest. Investors looking to assess how BSMM reacts to changes in the municipal bond market can gain valuable insights through its correlation analysis.
The BSMM Sector ETF is primarily focused on U.S. municipal bonds with maturities or effective maturities in the year 2022. These bonds are exempt from federal income tax and are required to have investment-grade credit ratings. The ETF seeks to track the performance of a portfolio of such bonds, emphasizing market value weighting with a 5% limit on individual issuers. As of August 31, 2021, the ETF's underlying index consisted of 3,026 constituents. It is important to note that the BSMM Sector ETF is set to terminate on or about December 15, 2022, and will distribute its net assets to shareholders at that time. The fund does not follow a predetermined cash distribution strategy at maturity but aims to invest in various instruments, including VRDOs, derivatives, ETFs, and municipal bonds not in the index, to help track the underlying index.
The exposure characteristic of the BSMM ETF (BSMM) is designed to provide investors with targeted exposure to the municipal bond market with maturities primarily in the year 2022. This ETF aims to track the performance of a portfolio of U.S. dollar-denominated investment-grade municipal bonds. These bonds are issued by various entities, including U.S. states, state agencies, territories, and local governments, and they are selected based on specific eligibility criteria, such as credit ratings and face value. Investors looking for fixed income investments with a focus on this specific maturity year can consider BSMM to potentially benefit from the performance of 2022 Bonds.
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