BSCA provides exposure to investment-grade corporate bonds maturing in 2036, functioning like a bond ladder in a single ETF. The fund will terminate in December 2036, returning remaining principal to investors.
How It Works
The ETF holds a diversified portfolio of USD-denominated corporate bonds all maturing in 2036, weighted by market value. As bonds mature or are called, proceeds are held in cash rather than reinvested, creating a natural wind-down. The portfolio's duration shortens each year as maturity approaches, reducing interest rate sensitivity over time.
Key Features
- Built-in maturity date eliminates reinvestment risk and provides known cash flow timing
- More diversified than buying individual bonds while maintaining defined maturity structure
- Duration naturally decreases from ~12 years at launch toward zero at maturity
Risks
- Credit spreads could widen 100-200bps in recession, causing 10-20% price declines before maturity
- Rising rates could drive 15-25% losses given long duration, though impact lessens over time
- Limited liquidity as fund approaches maturity could create 2-5% trading spreads
Who Should Own This
Best for investors with specific 2036 liabilities or those building bond ladders for retirement income. Works well for target-date fund managers or individuals who want corporate bond exposure with a known end date. Not suitable for traders given the hold-to-maturity design.