Investors are changing allocations to fixed income ETFs to capture the greatest yield with the most attractive risk.
The beginning of a rate-cutting cycle has historically tended to signal an important shift in the market environment for investors.
This has led investors to the Invesco Senior Loan ETF (BKLN ), the Invesco Equal Weight 0-30 Year Treasury ETF (GOVI ), the Invesco National AMT-Free Municipal Bond ETF (PZA ), and the Invesco BulletShares 2029 Corporate Bond ETF (BSCT ), which have seen the greatest four-week net flows across Invesco’s range of fixed income ETFs.
Fixed Income ETFs by Four-Week Flows
BKLN has garnered $626 million over the past four weeks, bringing year-to-date net flows to $1.6 billion.
BKLN is based on the Morningstar LSTA US Leveraged Loan 100 Index. The ETF’s underlying index tracks the market-weighted performance of the largest institutional leveraged loans based on market weightings, spreads, and interest payments, according to Invesco’s website.
Senior bank loans are debt securities issued to a company by a bank or similar financial institution and then repackaged and sold to investors. Senior bank loans have variable interest rates and adjust periodically with the market.
BKLN’s 30-day SEC yield is 7.44% as of Nov. 5.
GOVI has seen $320 million in net flows over a four-week period and $443 million in net flows year to date.
GOVI is based on the ICE 1-30 Year Laddered Maturity US Treasury Index. The index tracks the performance of up to 30 U.S. Treasury Notes or Bonds representing the annual February maturity ladder across the yield curve.
GOVI’s 30-day SEC yield is 4.22% as of Nov. 5.
PZA has accreted $192 million over a four-week period and $518 million year to date.
PZA seeks to track an index of tax-exempt municipal debt that is not subject to the alternative minimum tax (AMT). The ETF contains municipal bonds considered investment grade.
The fund’s 30-day SEC yield is 3.58% as of Nov. 5.
BSCT has seen $109 million in four-week net flows and $748 million year to date.
BSCT is based on the Invesco BulletShares® Corporate Bond 2029 Index, which seeks to measure the performance of a portfolio of U.S.-dollar-denominated, investment-grade corporate bonds with effective maturities in 2029.
BSCT’s 30-day SEC yield is 4.69% as of Nov. 5.
See more: How Investors Are Using Invesco’s BulletShares ETFs
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