ETF Education Report: Invesco BulletShares 2031 Municipal Bond ETF (BSMV)

What this ETF is trying to do

The Invesco BulletShares 2031 Municipal Bond ETF (BSMV) 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 mature in a specific year—in this case, 2031.

What the numbers show

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

• Price Return: This measures only the change in the share price.

• Total Return: This includes both the share price changes and the cash distributions (dividends) paid out to investors.

For BSMV, the numbers show different trends depending on the time frame:

• Year-to-Date (YTD): The price return is approximately -5.44%, while the total return is approximately -3.32%.

• One Year: The price return is approximately -5.04%, while the total return is approximately -2.21%.

• Three Years: The price return is approximately 0.25%, while the total return is approximately 9.64%.

To visualize the price change, we can look at an estimated price from roughly one year ago. The price was approximately $21.04, and the current price is $19.99.

Income and distribution explanation

This ETF provides cash distributions to investors. The current distribution yield is approximately 3.08%. These payments usually happen monthly, with the most recent 12 months showing 12 payouts. Most of these payments have 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 your 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). While a falling share price is not the same thing as NAV erosion, we use an "erosion-risk score" to measure potential risks.

BSMV has an erosion score of 75, which is labeled as "mild price erosion." This is considered a mild level of risk, and there is no severe erosion-risk flag for this ETF.

Pros

• The three-year total return is positive at approximately 9.64%.

• The ETF provides regular monthly cash distributions.

Cons

• The year-to-date and one-year price returns have been negative.

• The five-year total return is approximately -8.68%.

Beginner takeaway

When studying BSMV, notice that the total return is higher than the price return in most periods. This happens because the cash distributions help offset some of the share-price declines. However, investors should always look at both price movement and total returns to get the full picture of how an ETF is performing.