BSMQ | Invesco BulletShares 2026 Municipal Bond ETF

BSMQ ISSUER

Invesco, as the issuer of the BSMQ, primarily focuses on investing in securities that constitute the Underlying Index, with at least 80% of its assets allocated accordingly. Managed by Invesco Indexing LLC, an entity affiliated with both Invesco Capital Management LLC and Invesco Distributors, Inc., the Fund's objective revolves around tracking the performance of a portfolio consisting of U.S. dollar-denominated investment-grade municipal bonds maturing or having effective maturities in 2026, known as 2026 Bonds. These bonds may include embedded issuer call options, influencing their effective maturity dates. The selection criteria for bonds in the Underlying Index are stringent, requiring exemption from federal income tax, fixed interest payments, and minimum credit ratings from agencies like S&P Global Ratings, Fitch Ratings Inc., or Moody's Investors Service, Inc. Moreover, eligible bonds must have a minimum outstanding face value of $15 million. The Underlying Index, as of October 31, 2023, comprised 3,310 constituents and operates with a termination date around December 15, 2026. During its maturing year, the Fund may reinvest proceeds from maturing or called bonds into a diversified set of instruments, including VRDOs, derivatives, ETFs, money market funds, and municipal bonds not included in the Underlying Index. Utilizing a sampling methodology rather than purchasing all securities in the index, Invesco aims to avoid undue concentration in any one industry or group of industries, in line with its concentration policy.

BSMQ DIVIDEND

BSMQ, managed by Invesco, offers dividends to its shareholders based on the performance of its underlying assets. The dividend distribution is typically derived from the income generated by the securities held within the Fund, primarily comprising U.S. dollar-denominated investment-grade municipal bonds with maturities or effective maturities in 2026. These bonds provide fixed interest payments, contributing to the overall dividend yield of the Fund. Additionally, any capital gains realized from the sale of securities within the Fund may also be distributed as dividends to shareholders. The frequency and amount of dividends may vary depending on factors such as interest rates, bond market conditions, and the Fund's investment strategy. Investors in BSMQ can anticipate regular dividend payments, providing an income stream aligned with the Fund's investment objectives.

BSMQ TRACKING

BSMQ, overseen by Invesco, employs a tracking methodology aimed at mirroring the performance of its designated benchmark index, the Underlying Index. This index is compiled and maintained by Invesco Indexing LLC, an entity affiliated with the Fund's investment adviser and distributor. BSMQ primarily invests at least 80% of its assets in securities that constitute the Underlying Index, which comprises U.S. dollar-denominated investment-grade municipal bonds maturing or having effective maturities in 2026. By adhering to the index's composition and weighting methodology, BSMQ seeks to replicate the investment characteristics and returns of its benchmark. However, as the Fund does not purchase all securities within the index, it employs a sampling technique to achieve its tracking objective efficiently. Through diligent portfolio management and periodic rebalancing, BSMQ endeavors to closely track the performance of the Underlying Index, providing investors with a vehicle to gain exposure to the targeted segment of the municipal bond market.

BSMQ CORRELATION

BSMQ, managed by Invesco, exhibits a correlation with its designated benchmark index, the Underlying Index, which tracks the performance of U.S. dollar-denominated investment-grade municipal bonds maturing or having effective maturities in 2026. As BSMQ primarily invests at least 80% of its assets in securities that constitute the Underlying Index, the Fund's performance tends to move in tandem with fluctuations in the underlying bond market represented by the index. However, the degree of correlation may vary over time due to factors such as interest rate movements, changes in credit quality, and market conditions. While BSMQ aims to closely track the performance of the Underlying Index, variations in performance may occur due to differences in the Fund's holdings, sampling methodology, and other factors influencing the municipal bond market. Nonetheless, BSMQ offers investors an opportunity to gain exposure to the targeted segment of the bond market while considering the correlation dynamics between the Fund and its benchmark index.

BSMQ SECTOR

BSMQ, under the management of Invesco, operates within the municipal bond sector, specifically focusing on U.S. dollar-denominated investment-grade municipal bonds with maturities or effective maturities in 2026. The Fund's investment strategy revolves around tracking the performance of its benchmark index, the Underlying Index, which comprises a diversified portfolio of bonds issued by U.S. states, state agencies, territories, possessions of the United States, the District of Columbia, or local governments. BSMQ investors gain exposure to this sector through the Fund's holdings, which are selected based on stringent criteria, including exemption from federal income tax, fixed interest payments, and minimum credit ratings from reputable agencies such as S&P Global Ratings, Fitch Ratings Inc., or Moody's Investors Service, Inc. By focusing on the municipal bond sector, BSMQ offers investors the potential for income generation and capital appreciation while maintaining a focus on high credit quality and tax-exempt income.

BSMQ EXPOSURE

BSMQ, managed by Invesco, provides investors with exposure to the U.S. dollar-denominated investment-grade municipal bond market, specifically targeting bonds with maturities or effective maturities in 2026. The Fund's investment strategy aims to replicate the performance of its benchmark index, the Underlying Index, which consists of a diversified portfolio of municipal bonds issued by various entities, including U.S. states, state agencies, territories, possessions of the United States, the District of Columbia, or local governments. Through BSMQ, investors gain access to a broad range of municipal bonds while benefiting from the Fund's focus on bonds that offer tax-exempt income, fixed interest payments, and high credit quality ratings. This exposure allows investors to potentially earn income and capitalize on capital appreciation opportunities within the municipal bond market while mitigating risks associated with individual bond selection.