Invesco BulletShares 2031 High Yield Corporate Bond ETF (BSJV) seeks to track a portfolio of high-yield corporate bonds that mature in 2031, providing investors with exposure to below-investment-grade corporate debt with a defined maturity date. This target-date bond ETF holds junk bonds from companies with credit ratings below BBB-, offering higher yields in exchange for increased credit risk.
How It Works
BSJV uses a buy-and-hold strategy, purchasing high-yield corporate bonds issued by companies with below-investment-grade credit ratings, all maturing in 2031. The fund maintains a passive approach with minimal trading, allowing bonds to mature naturally rather than actively managing duration. Holdings are selected based on credit quality criteria and maturity dates, with the entire portfolio designed to terminate in 2031 when all bonds reach maturity and principal is returned to investors.
Key Features
- Target maturity date of 2031 eliminates interest rate risk as bonds approach maturity, unlike perpetual bond ETFs
- High dividend yield of 5.51% from below-investment-grade corporate bonds provides attractive income in low-rate environments
- Self-liquidating structure returns principal at maturity, making it suitable for defined investment horizons and liability matching
Risks
- This ETF can lose value if corporate issuers default on their bonds, with high-yield bonds experiencing 2-4% annual default rates historically
- Credit spread widening during economic stress can cause significant price declines, potentially 10-20% in recession scenarios before recovery
- Early years carry higher volatility as longer duration amplifies price sensitivity to interest rate and credit spread changes
Who Should Own This
Best suited for income-focused investors with medium-to-high risk tolerance seeking higher yields than investment-grade bonds over a 7-8 year horizon through 2031. Works as a satellite holding (5-15% of fixed income allocation) for investors comfortable with credit risk who want defined maturity exposure for liability matching or retirement planning.