NEW YORK, Oct. 11, 2016 (GLOBE NEWSWIRE) -- Guggenheim Investments, the global asset management and investment advisory business of Guggenheim Partners, today announced the distribution schedules associated with the maturities of Guggenheim BulletShares® 2016 Corporate Bond ETF (NYSE:BSCG) and 2016 BulletShares High Yield Corporate Bond ETF (NYSE:BSJG). These will be the 10th and 11th funds in the Guggenheim BulletShares® suite of defined-maturity ETFs to mature.
Launched in 2010, the Guggenheim BulletShares® lineup consists of 20 unique defined-maturity corporate bond and high yield corporate bond ETFs with maturities spanning from 2016 to 2026. BulletShares are designed to mature in their target year, providing investors with specific maturities to ladder portfolios or to manage their fixed-income exposure within specific investment time frames. The BulletShares suite had approximately $7.6 billion in assets under management as of October 5, 2016.
Guggenheim Investments has successfully matured nine BulletShares ETFs over the course of 2011, 2012, 2013, 2014, and 2015.
Unlike traditional ETFs, which have a perpetual life, defined-maturity ETFs have a specified maturity date established when the ETF is launched. With maturity dates spanning from 2016 to 2026, BulletShares track indices of approximately 30 to 320 corporate bonds with effective maturities in the same calendar year as each fund’s maturity. When the fund reaches the maturity date, the fund’s final net asset value (NAV) is returned to the current shareholders.
A defined-maturity ETF’s portfolio is primarily comprised of securities that mature throughout the fund’s stated maturity year. This defined maturity structure results in a duration profile similar to that of an individual bond - the fund’s duration should decline as it approaches maturity, reducing sensitivity to interest rate changes. BSCG and BSJG do not seek to return any predetermined amount at maturity.
Maturity Schedule for Guggenheim BulletShares® 2016 Corporate Bond ETF (BSCG) and
Guggenheim BulletShares® 2016 High Yield Corporate Bond ETF (BSJG)
- Final day of trading: December 29, 2016
- Maturity distribution announcement date: December 29, 2016
- Maturity distribution effective date: December 30, 2016
- Maturity distribution payable date: December 30, 2016
Unlike other fixed-income ETFs, BulletShares are designed to mature in their target year, providing advisors and investors with specific maturities to ladder portfolios or to manage their fixed-income exposure within specific investment time frames.
“Our investment-grade and high yield BulletShares offer investors a creative way to tap into the fixed- income market by focusing on securities with a given maturity date,” said William Belden, Managing
Director, Head of ETF Business Development at Guggenheim Investments. “The defined-maturity feature continues to be an effective investment strategy for investors looking to save for life events like retirement and college costs amid a volatile economic environment.”
Advisors and investors seeking to create and implement customized laddering strategies can access the BulletShares ETF Bond Laddering Tool by visiting guggenheiminvestments.com/products/etf/bondladder.
The Laddering Tool can be used to customize a hypothetical ladder by factoring such criteria as maturity range, portfolio weighting, duration, yield distribution, yield-to-maturity, yield-to-worst, and number of holdings.
“Bond laddering offers a number of potential benefits, but creating bond ladders with individual bonds can be time consuming and cost prohibitive,” said Belden. “In contrast, Guggenheim BulletShares ETFs offer investors a cost-effective and convenient approach to portfolio laddering.”
As bonds in a laddered portfolio mature, the cash distribution is generally utilized to cover lifestyle needs or reinvested in new bonds at the longest maturity of the ladder at the then current interest rate. Prior to maturity, this approach offers potential advantages in both rising and falling interest rate environments. “If interest rates increase, an investor can reinvest the proceeds, if any, from maturing bonds at higher interest rates,” Belden said. “If interest rates decrease, the investor potentially benefits from price appreciation as the portfolio’s higher-yielding bonds increase in value.”
In addition to the BulletShares ETF Bond Laddering Tool, advisors and investors can access three short three-minute videos designed to educate advisors and investors on the valuable features and potential benefits BulletShares can provide. The videos can be accessed on the ETF Education home page in the Exchange Traded Funds section of the Guggenheim Investments site or at guggenheiminvestments.com/products/etf/etf-education.
For more information, please visit http://www.guggenheiminvestments.com/etf or call 888.WHY.ETFS to speak to a representative.
About Guggenheim Investments BulletShares® ETFs
Combining the benefits of bonds—control of portfolio maturity, yield and credit quality—with the broad diversification, liquidity and convenience of ETFs, Guggenheim Investments BulletShares® ETFs offer investors the best of both worlds. With maturity dates spanning from 2016 to 2026, there are 20 corporate bond and high-yield corporate bond BulletShares ETFs to choose from. These defined-maturity ETFs enable investors to implement date-sensitive investment strategies such as building a laddered bond portfolio, filling gaps in existing portfolios, obtaining year-specific yield-curve exposure and managing future cash flow needs. To view the entire BulletShares offering, please visit guggenheiminvestments.com/etf.
About Guggenheim Investments
Guggenheim Investments is the global asset management and investment advisory division of Guggenheim Partners, with $202 billion1 in assets across fixed income, equity, and alternative strategies. We focus on the return and risk needs of insurance companies, corporate and public pension funds, sovereign wealth funds, endowments and foundations, consultants, wealth managers, and high-net-worth investors. Our 275+ investment professionals perform rigorous research to understand market trends and identify undervalued opportunities in areas that are often complex and underfollowed. This approach to investment management has enabled us to deliver innovative strategies providing diversification and attractive long-term results.
1Guggenheim Investments total asset figure is as of 06.30.2016 and includes $11.4bn of leverage for assets under management and $0.5bn for assets for which Guggenheim provides administrative services. Guggenheim Investments represents the following affiliated investment management businesses: Guggenheim Partners Investment Management, LLC, Security Investors, LLC, Guggenheim Funds Investment Advisors, LLC, Guggenheim Funds Distributors, LLC, Guggenheim Real Estate, LLC, Transparent Value Advisors, LLC, GS GAMMA Advisors, LLC, Guggenheim Partners Europe Limited and Guggenheim Partners India Management.
Past performance is no guarantee of future results.
RISK CONSIDERATIONS Investors should consider the following risk factors and special considerations associated with investing in the funds, which may cause you to lose money, including the entire principal amount that you invest. Interest Rate Risk: As interest rates rise, the value of fixed-income securities held by the funds is likely to decrease. Securities with longer durations tend to be more sensitive to interest rate changes, making them more volatile than securities with shorter durations. Credit/Default Risk: The risk that issuers or guarantors of debt instruments or the counterparty to a derivatives contract (BulletShares Corporate Bond ETFs only), repurchase agreement or loan of portfolio securities is unable or unwilling to make timely interest and/or principal payments or otherwise honor its obligations. Debt instruments are subject to varying degrees of credit risk, which may be reflected in credit ratings. Securities issued by the U.S. government have limited credit risk. Credit rating downgrades and defaults (failure to make interest or principal payment) may potentially reduce the funds’ income and share prices. Asset Class Risk: The bonds in the funds’ portfolio may underperform the returns of other bonds or indices that track other industries, markets, asset classes, or sectors. Call Risk/Prepayment Risk: During periods of falling interest rates, an issuer of a callable bond may exercise its right to pay principal on an obligation earlier than expected. This may result in the funds having to reinvest proceeds at lower interest rates, resulting in a decline in the funds’ income. Extension Risk: The risk that an issuer will exercise its right to pay principal on an obligation later than expected. This may happen when there is a rise in interest rates. Under these circumstances, the value of the obligation will decrease and the funds’ performance may suffer from their inability to invest in higher yielding securities. Income Risk: The risk that falling interest rates will cause the funds’ income to decline. Liquidity Risk: If the funds invest in illiquid securities or securities that become illiquid, fund returns may be reduced because the funds may be unable to sell the illiquid securities at an advantageous time or price. Declining Yield Risk: During the final year of the funds’ operations, as the bonds held by the funds mature and the funds’ portfolio transitions to cash and cash equivalents, the funds’ yield will generally tend to move toward the yield of cash and cash equivalents and thus may be lower than the yields of the bonds previously held by the funds and/or prevailing yields for bonds in the market. Fluctuation of Yield and Liquidation Amount Risk: The funds, unlike a direct investment in a bond that has a level coupon payment and a fixed payment at maturity, will make distributions of income that vary over time. Unlike a direct investment in bonds, the breakdown of returns between fund distributions and liquidation proceeds are not predictable at the time of your investment. For example, at times during the funds’ existence, they may make distributions at a greater (or lesser) rate than the coupon payments received on the funds’ portfolio, which will result in the funds returning a lesser (or greater) amount on liquidation than would otherwise be the case. The rate of fund distribution payments may adversely affect the tax characterization of your returns from an investment in the funds relative to a direct investment in corporate bonds. If the amount you receive as liquidation proceeds upon the funds’ termination is higher or lower than your cost basis, you may experience a gain or loss for tax purposes. In addition the funds are subject to Non-Correlation Risk, Replication Management Risk, Issuer-Specific Changes, and Non-Diversified Fund Risk. The investment-grade corporate bond ETFs also entail the following risks. Foreign Issuers Risk: Investing in U.S. registered, dollar-denominated bonds of foreign corporations which have different risks than investing in U.S. companies. These include currency, political, and economic risk, as well as less market liquidity, generally greater market volatility and less complete financial information than for U.S. issuers. Derivatives Risk: The funds may invest in certain types of derivatives contracts, including futures, options, and swaps, which increases the risk of loss for the funds. The high-yield corporate bond ETFs also entail the following risks: High-Yield Securities Risk: The funds invest in bonds that are rated below investment-grade and are considered to be “junk” securities. While these securities generally offer a higher current yield than that available from higher grade issues, they typically involve greater risk. The ability of issuers of high-yield securities to make timely payments of interest and principal may be adversely impacted by adverse changes in general economic conditions, changes in the financial condition of the issuers, and price fluctuations in response to changes in interest rates. High-yield securities are less liquid than investment grade securities and may be difficult to price or sell, particularly in times of negative sentiment toward high-yield securities. Concentration Risk: If the index concentrates in an industry or group of industries, the fund’s investments will be concentrated accordingly. In such event, the value of the fund’s shares may rise and fall more than the value of shares of a fund that invests in securities of companies in a broader range of industries. In addition, the high-yield corporate bond ETFs may entail some or all of the following sector risks: Financial Services Sector Risk, Consumer Staples Sector Risk, Telecommunications Sector Risk, and Consumer Discretionary Sector Risk.
Please read each fund’s prospectus for more detailed information on these risks and considerations. As with any investment, you should consider how your investment will be taxed. The tax information contained in the prospectus is provided as general information. Investors should consult their own tax professional about the tax consequences of an investment as Guggenheim Funds Distributors, LLC does not offer tax advice.
Read a fund’s prospectus and summary prospectus (if available) carefully before investing. It contains the fund’s investment objectives, risks, charges, expenses and other information, which should be considered carefully before investing. Obtain a prospectus and summary prospectus (if available) at www.guggenheiminvestments.com or call 800.820.0888.
INDEX DISCLOSURE BulletShares®, BulletShares® USD Corporate Bond Index, and BulletShares® USD High Yield Corporate Bond Index are trademarks of Accretive Asset Management LLC and have been licensed for use by Guggenheim Investments. Accretive Asset Management, LLC is an affiliate of Guggenheim Investments.
The referenced funds are distributed by Guggenheim Funds Distributors, LLC. Guggenheim Investments represents the investment management businesses of Guggenheim Partners, LLC (“Guggenheim”), which includes Guggenheim Funds Investment Advisors, LLC ("GFIA"), the investment advisor to the referenced fund. Guggenheim Funds Distributors, LLC is affiliated with Guggenheim and GFIA.
NOT FDIC INSURED • NOT BANK GUARANTEED • MAY LOSE VALUE
Media Contact Ivy McLemore Guggenheim Partners 212.518.9859 – office Ivy.McLemore@guggenheimpartners.com
Source: Guggenheim Investments