Why This Fund Bet $4.6 Million on 2031 Corporate Bonds and Rotated Out of Short-Term Bonds
Key Points
California-based Carmel Capital Partners acquired a new position in BSCV, with 275,214 shares added in the third quarter.
The transaction had an estimated value of $4.6 million.
The stake now represents 1.9% of the fund’s $237.2 million in reportable assets as of September 30.
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On Thursday, California-based Carmel Capital Partners disclosed a new position in BSCV, acquiring 275,214 shares for an estimated $4.6 million in the third quarter.
What Happened
Carmel Capital Partners initiated a new stake in the Invesco BulletShares 2031 Corporate Bond ETF (NASDAQ:BSCV), acquiring approximately 275,214 shares in the third quarter. The estimated value of the trade was $4.6 million, based on the average share price for the period. The transaction was disclosed in a U.S. Securities and Exchange Commission (SEC) filing on Thursday.
What Else to Know
This was a new position, accounting for 1.9% of the fund’s $237.2 million reportable assets as of September 30.
Top holdings after the filing:
- NYSE:HD: $32.1 million (13.5% of AUM)
- NYSEMKT:USFR: $27.2 million (11.4% of AUM)
- NASDAQ:PLTR: $20.7 million (8.7% of AUM)
- NYSE:LEN: $12.6 million (5.3% of AUM)
- NYSEMKT:CLOZ: $5.7 million (2.4% of AUM)
As of Friday's market close, BSCV shares were priced at $16.66, up 3% over the past year.
ETF Overview
| Metric | Value |
|---|---|
| AUM | $1.3 billion |
| Price (as of market close Friday) | $16.66 |
| Yield to maturity | 4.5% |
| 1-year total return | 5% |
ETF Snapshot
- BSCV's investment strategy targets U.S. dollar-denominated investment grade corporate bonds maturing in 2031, seeking to track a rules-based index of such securities.
- The portfolio is composed primarily of investment-grade corporate bonds maturing in 2031, providing a defined maturity structure.
- The fund is structured as a non-diversified ETF with a targeted bond maturity profile.
Invesco BulletShares 2031 Corporate Bond ETF offers investors targeted exposure to investment-grade corporate bonds maturing in 2031, combining a defined maturity date with the liquidity and transparency of an exchange-traded fund.
Foolish Take
Carmel Capital Partners’ new stake in the Invesco BulletShares 2031 Corporate Bond ETF (NASDAQ: BSCV) signals a tactical pivot toward longer-duration, investment-grade credit exposure. The California-based fund bought 275,214 shares worth an estimated $4.6 million in the third quarter, according to an SEC filing. The position now accounts for about 1.9% of its $237 million in reportable assets.
The move comes as Carmel seemingly restructured its fixed-income portfolio—selling out of shorter-dated ETFs like BSCQ and BSCR while adding to Eldridge’s BBB B-rated corporate bond ETF (BBB). This pattern suggests a willingness to extend duration and assume slightly higher credit risk in pursuit of yield.
BSCV, which holds investment-grade corporate bonds maturing in 2031, offers defined-maturity exposure with a predictable return profile. For long-term investors, Carmel’s allocation underscores the appeal of structured bond ladders in today’s environment: combining income potential with the flexibility of ETFs. Ultimately, funds like BSCV could benefit from falling yields.
Glossary
ETF (Exchange-Traded Fund): An investment fund traded on stock exchanges, holding assets like stocks or bonds.
Investment grade: Bonds rated as relatively low risk of default by credit rating agencies.
Defined maturity: A set date when a bond or fund returns principal to investors.
Non-diversified ETF: A fund that may invest a larger portion of assets in fewer securities or sectors.
AUM (Assets Under Management): The total market value of assets a fund or firm manages on behalf of clients.
Dividend yield: Annual dividends paid by a security, expressed as a percentage of its price.
Total return: The investment's price change plus all dividends and distributions, assuming those payouts are reinvested.
Trailing annual dividend yield: Dividend yield calculated using dividends paid over the past 12 months.
Rules-based index: An index constructed using a predetermined set of rules or criteria, not active selection.
Corporate bond: A debt security issued by a corporation to raise capital, paying interest to investors.
Position: The amount of a particular security or asset held by an investor or fund.
TTM: The 12-month period ending with the most recent quarterly report.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Home Depot, Lennar, and Palantir Technologies. The Motley Fool has a disclosure policy.
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