This Fund Dumped 2026 Bonds for 2031 — and BBB Exposure

On Thursday, California-based Carmel Capital Partners disclosed in an SEC filing that it sold out its entire BSCQ position, an estimated $5.87 million trade.

What Happened

According to a regulatory filing released on Thursday, Carmel Capital Partners liquidated its full position in the Invesco BulletShares 2026 Corporate Bond ETF (NASDAQ:BSCQ) during the third quarter. The transaction involved selling 300,704 shares for an estimated $5.9 million. No BSCQ shares remain in the portfolio after this sale, per the filing.

What Else to Know

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, BSCQ shares were priced at $19.57, up 0.75% year-over-year.

ETF Overview

ETF Snapshot

• BSCQ's investment strategy focuses on tracking an index of U.S. dollar-denominated investment-grade corporate bonds maturing in 2026, aiming to provide a defined maturity profile for investors.
• The portfolio primarily consists of high-quality corporate bonds maturing or effectively maturing in 2026.
• The ETF is structured to be transparent and passively managed.

Invesco BulletShares 2026 Corporate Bond ETF (BSCQ) offers investors targeted exposure to a diversified basket of investment-grade corporate bonds maturing in 2026.

Foolish Take

Carmel Capital Partners’ complete exit from the Invesco BulletShares 2026 Corporate Bond ETF (NASDAQ: BSCQ) marks a clear shift toward longer-dated and higher-yielding corporate credit exposure. The move fits within a broader repositioning of Carmel’s fixed-income strategy. Alongside the BSCQ sale, the firm also dumped BSCR and added sizable stakes in the Invesco BulletShares 2031 Corporate Bond ETF (BSCV) and Eldridge’s BBB B-rated Corporate Credit ETF (CLOZ), signaling a tactical shift from near-term maturities to higher-yield, and more flexible, longer-duration holdings.

For long-term investors, Carmel’s rotation underscores how as short-term ETFs like BSCQ mature, reinvestment into longer horizons can lock in yields while balancing risk. With defined-maturity ETFs such as BSCV providing clarity on duration and cash flow, Carmel appears to be positioning for a softer rate environment ahead.

Glossary

13F assets under management (AUM): The total market value of securities reported by institutional investment managers in quarterly SEC 13F filings.
Liquidated: Sold off an entire investment position, converting holdings into cash.
Allocation: The percentage of a portfolio's total value assigned to a specific asset, sector, or investment.
Dividend yield: Annual dividends paid by an investment divided by its current price, shown as a percentage.
Total return: The investment's price change plus all dividends and distributions, assuming those payouts are reinvested.
Passively managed: An investment strategy aiming to replicate a market index rather than actively selecting securities.
Investment grade: Bonds rated as relatively low risk of default by credit rating agencies, typically BBB/Baa or higher.
Defined maturity profile: An investment approach where all holdings mature in or around a specific year, providing a set end date.
Transparent: Describes funds that fully disclose their holdings and investment strategies to investors.

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.