Guggenheim expands defined-maturity ETF range with three new BulletShares

Mar 28th, 2012 | By | Category: Fixed Income

US-based Guggenheim Investments has expanded its range of defined-maturity corporate bond ETFs with the launch of three new BulletShares.

Guggenheim expands defined-maturity bond ETF range with three new BulletShares

Guggenheim has expanded its defined-maturity bond ETF range with launch of three new BulletShares. Defined-maturity products have proved popular for retirement planning.

The three funds, all NYSE listed, are: the Guggenheim BulletShares 2018 Corporate Bond ETF (BSCI), the Guggenheim BulletShares 2019 Corporate Bond ETF (BSCJ) and the Guggenheim BulletShares 2020 Corporate Bond ETF (BSCK).

Defined-maturity ETFs, which Guggenheim brands ‘BulletShares’, possess all of the features of traditional fixed-income ETFs with one distinct difference: a specified maturity date, making them highly attractive for retirement planning.

Each fund is structured to track an index comprised of bonds that all mature in a particular year. During that year, the index and ETF terminate and the fund’s net assets are distributed to shareholders. This gives defined-maturity ETFs an investment and cash-flow profile similar to bonds but with all the advantages inherent in an ETF.

Adding to their appeal is the fact that the funds offer a level of liquidity, price transparency and trading flexibility typically not available in the over-the-counter (OTC) market in which bonds trade. As such, the funds may serve as a diversified substitute for individual bonds, providing investors access to strategies they may not have been able to otherwise implement. They may be a compelling alternative to other fixed-income products as well.

The Guggenheim BulletShares ETF range consists of 10 unique fixed-income defined-maturity corporate bond and high-yield corporate bond ETFs. Assets in the range recently surpassed $1 billion.

BulletShares track indices comprising approximately 70 to 190 corporate bonds with effective maturities in the same calendar year as each fund’s maturity, with maturity dates ranging from 2012 to 2020 at this time.

The complete line-up includes (all listed on NYSE Arca):

Guggenheim BulletShares 2012 Corporate Bond ETF (BSCC)
Guggenheim BulletShares 2013 Corporate Bond ETF (BSCD)
Guggenheim BulletShares 2014 Corporate Bond ETF (BSCE)
Guggenheim BulletShares 2015 Corporate Bond ETF (BSCF)
Guggenheim BulletShares 2016 Corporate Bond ETF (BSCG)
Guggenheim BulletShares 2017 Corporate Bond ETF (BSCH)
Guggenheim BulletShares 2018 Corporate Bond ETF (BSCI)
Guggenheim BulletShares 2019 Corporate Bond ETF (BSCJ)
Guggenheim BulletShares 2020 Corporate Bond ETF (BSCK)
Guggenheim BulletShares 2012 High Yield Corporate Bond ETF (BSJC)
Guggenheim BulletShares 2013 High Yield Corporate Bond ETF (BSJD)
Guggenheim BulletShares 2014 High Yield Corporate Bond ETF (BSJE)
Guggenheim BulletShares 2015 High Yield Corporate Bond ETF (BSJF)

Commenting on the new additions, William Belden, head of product development for Guggenheim Investments, said: “Advisers are using BulletShares to provide the benefits of liquidity and transparency, and we are committed to growing this suite. We’ve found that there is a strong interest in additional maturity dates to use in portfolio construction so we’re pleased to expand the line-up to meet their needs.”

The BulletShares 2011 Corporate Bond ETF (BSCB), which matured in December 2011, was the first BulletShares product to mature.

As of year-end 2011, Guggenheim Investments’ total ETP assets under management were $11 billion, putting the company in eighth place in terms of AUM among US ETF providers.

UK investors should be aware that these funds do not have UK Reporting or Distributor Status.

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