Understanding the Invesco BulletShares 2027 Municipal Bond ETF (BSMR)

What this ETF is trying to do

The Invesco BulletShares 2027 Municipal Bond ETF (ticker: BSMR) is an exchange-traded fund. While the specific holdings are not listed in this report, this type of ETF generally focuses on municipal bonds that reach a specific target date—in this case, 2027.

What the numbers show

When looking at an ETF, it is important to know the difference between "price return" and "total return."

• Price Return: This only tracks how much the share price itself has changed.

• Total Return: This includes both the change in share price and the money paid out through distributions.

For BSMR, the numbers show:

• Year-to-Date (YTD): The price return is approximately -1.62%, but the total return is 0.4%.

• One Year: The price return was approximately -1.64%, while the total return was 1.04%.

• Three Year: The price return was approximately 2.02%, while the total return was 10.85%.

To visualize the price change, we can look at an estimated price from roughly one year ago, which was $23.67. The current price is $23.28.

Income and distribution explanation

This ETF provides cash distributions to investors. The distribution yield is approximately 2.74%. These payments usually happen monthly, with 12 distributions recorded over the last year. Most of these payments occurred on Mondays.

It is important to remember that a distribution yield tells you how much cash was paid out relative to the price, but it is not the same as total return.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the assets held by the fund). Some investors worry about this because if the value of the underlying assets drops significantly, it can affect the fund.

For BSMR, the erosion-risk score is 94, which is labeled as "Stable / sideways." The erosion severity is rated as "good," and there is no severe erosion-risk flag present.

Pros

• The fund has a high income rating grade of "A."

• The total return figures are higher than the price return figures, meaning distributions have added value to the overall performance.

Cons

• The share price has seen some declines (negative price returns) over the year-to-date and one-year periods.

Beginner takeaway

When studying BSMR, notice that the share price and the total return move differently. While the share price has gone down slightly over the last year, the total return remained positive because of the cash distributions. Always look at both price returns and total returns to get the full picture.