Guggenheim Extends Target-Date ETF Lineup

MarketsETF Trends

Expanding on its BulletShares target-date exchange traded fund line, Guggenheim launched investment-grade and high-yield corporate bond strategies to further help investors build out their bond laddering strategies as the market prepares for a rising rate environment.

On Wednesday, Guggenheim Investments rolled out the Guggenheim BulletShares 2026 Corporate Bond ETF (NYSEArca: BSCQ) and Guggenheim BulletShares 2024 High Yield Corporate Bond ETF (NYSEArca: BSJO). BSCQ has a 0.24% expense ratio and BSJO comes with a 0.42% expense ratio.

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BSCQ’s credit quality breakdown includes investment grade AA 18.9%, A 55.0% and BBB 26.1%.

BSJO’s credit quality breakdown includes speculative-grade BB 66.3%, B 30.9%, CCC 2.1% and CC 0.4%.

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As opposed to other fixed-income ETFs that hold a variety of debt securities to achieve their target strategy, the BulletShares line are designed to mature in their specified year, allowing investors to target maturities in an attempt to ladder portfolios or to manage their fixed-income exposure in a focused time frame.

“Our investment-grade and high yield BulletShares offer investors a creative way to tap into the fixed- income market by focusing on securities with a given maturity date,” William Belden, Managing Director, Head of ETF Business Development at Guggenheim Investments, said in a press release. “The defined-maturity feature continues to be an effective investment strategy for investors looking to save for life events like retirement and college amid a volatile economic environment.”

These defined-maturity bond funds typically buy bonds that mature in the year the ETF will terminate, ensuring that investors can collect the bonds’ face value at maturity, along with a steady income stream along the way. As such, investors are meant to buy-and-hold these securities until maturity.

In contrast, a regular bond ETF runs the risk of losing its original principal if interest rates go up, depending on the bond ETF’s effective duration, since typical bond funds would buy and sell debt securities to maintain their target short-, intermediate- or long-duration strategy.

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Using target-date bond funds, an investor could create a bond ladder strategy in a portfolio with varying maturity dates. The bonds’ maturity dates are evenly spaced across several years so that the proceeds from maturing bonds may be reinvested at regular intervals.

“If interest rates increase, an investor can reinvest the proceeds, if any, from maturing bonds at higher interest rates,” Belden said.

The other Guggenheim BulletShares ETFs include:

  • Guggenheim BulletShares 2016 High Yield Corporate Bond ETF (NYSEArca: BSJG)
  • Guggenheim BulletShares 2017 High Yield Corporate Bond ETF (NYSEArca: BSJH)
  • Guggenheim BulletShares 2018 High Yield Corporate Bond ETF (NYSEArca: BSJI)
  • Guggenheim BulletShares 2019 High Yield Corporate Bond ETF (NYSEArca: BSJJ)
  • Guggenheim BulletShares 2020 High Yield Corporate Bond ETF (NYSEArca: BSJK)
  • Guggenheim BulletShares 2021 High Yield Corporate Bond ETF (NYSEArca: BSJL)
  • Guggenheim BulletShares 2022 High Yield Corporate Bond ETF (NYSEArca: BSJM)
  • Guggenheim BulletShares 2023 High Yield Corporate Bond ETF (NYSEArca: BSJN)
  • Guggenheim BulletShares 2016 Corporate Bond ETF (NYSEArca: BSCG)
  • Guggenheim BulletShares 2017 Corporate Bond ETF (NYSEArca: BSCH)
  • Guggenheim BulletShares 2018 Corporate Bond ETF (NYSEArca: BSCI)
  • Guggenheim BulletShares 2019 Corporate Bond ETF (NYSEArca: BSCJ)
  • Guggenheim BulletShares 2020 Corporate Bond ETF (NYSEArca: BSCK)
  • Guggenheim BulletShares 2021 Corporate Bond ETF (NYSEArca: BSCL)
  • Guggenheim BulletShares 2022 Corporate Bond ETF (NYSEArca: BSCM)
  • Guggenheim BulletShares 2023 Corporate Bond ETF (NYSEArca: BSCN)
  • Guggenheim BulletShares 2024 Corporate Bond ETF (NYSEArca: BSCO)
  • Guggenheim BulletShares 2025 Corporate Bond ETF (NYSEArca: BSCP)

For more information on new fund products, visit our new ETFs category.

This article was provided by our partners at ETFTrends.