Blue wave or red wave, it’s important to get bond exposure to offset equities in a portfolio, especially with market forces still tilting on the side of uncertainty. As far as where to look for special opportunities in the bond market, municipal bonds are worth a look to capitalize on short-term movements following a presidential election with the Invesco BulletShares® 2021 Municipal Bond ETF (BSML).
Municipal bonds give investors exposure to a bond market that historically has low default rates. While a company can fold, local government typically won’t so the safety of investing in debt paid for by taxpayers adds that extra layer of assurance.
As for BSML, the fund is based on the Invesco BulletShares® USD Municipal Bond 2021 Index. The Fund will invest at least 80% of its total assets in municipal bonds that comprise the index. The Index seeks to measure the performance of a portfolio of US dollar-denominated, issued by US state, state agencies, or local governments with effective maturities in 2021.
The Fund does not purchase all of the securities in the Index; instead, the Fund utilizes a “sampling” methodology to seek to achieve its investment objective. The Fund and the Index are rebalanced monthly. The Fund has a designated year of maturity of 2021 and will terminate on or about Dec. 15, 2021. See the prospectus for more information.
Getting short-term bond exposure with a maturity date of 2021 also allows BSML