Invesco has extended its BulletShares defined-maturity municipal bond lineup with the Invesco BulletShares 2036 Municipal Bond ETF, giving investors a new exchange-traded vehicle for targeting investment-grade municipal debt scheduled to mature around a specific future year.

The fund trades under the ticker BSMA on the Nasdaq Stock Market. Nasdaq’s 2026 information-circular directory recorded the Invesco Exchange-Traded Self-Indexed Fund Trust product for a September 16 trade date on the Nasdaq Global Market, providing the exchange-side confirmation of the latest addition to the BulletShares franchise.

BSMA seeks to track, before fees and expenses, the ICE BulletShares Municipal Bond 2036 Index. The benchmark is designed around U.S. dollar-denominated investment-grade municipal securities that mature, or in certain circumstances are deemed to have an effective maturity, during 2036. The ETF charges a 0.18% annual management fee, with its final prospectus listing no other ordinary operating expenses and a total annual fund operating expense ratio of 0.18%.

The new fund expands a product architecture built around individual calendar-year maturity exposures rather than conventional perpetual bond indexes. Unlike a broad municipal bond ETF that continuously replaces maturing securities to maintain a relatively stable maturity profile, a BulletShares ETF is designed to move gradually toward its stated terminal year and ultimately wind down. For investors, that creates a portfolio tool that can resemble some of the cash-flow characteristics of a bond ladder while preserving the diversification, daily pricing and tradability of an ETF.

Invesco already offers municipal BulletShares spanning successive maturity years, including funds targeting bonds maturing from 2026 through 2035. Adding a 2036 vehicle allows investors and financial advisers managing rolling ladders to extend those portfolios another year rather than lengthening maturity exposure through a conventional open-ended municipal strategy.

The distinction is important for portfolio construction. A traditional bond fund has no predetermined end date, meaning an investor who needs principal at a particular future point generally must sell shares at the prevailing market price. A defined-maturity ETF instead has a scheduled termination, although its final cash distribution is not guaranteed at any specific dollar amount. Invesco’s prospectus states that BSMA is expected to terminate on or about December 15, 2036, subject to the board’s ability to alter the termination date.

At termination, the fund is expected to distribute its net assets in cash to shareholders after accounting for liabilities. The prospectus explicitly notes that BSMA does not seek to distribute a predetermined amount of cash at maturity. That is a significant difference from owning an individual bond to maturity at par: an ETF shareholder owns an interest in a changing portfolio, and the amount ultimately received depends on portfolio values, credit events, calls, expenses, trading activity and other factors over the fund’s life.

The underlying index applies a defined set of eligibility standards. According to Invesco’s final prospectus, the starting universe consists of U.S. dollar-denominated bonds issued by U.S. states, state agencies, territories and possessions, the District of Columbia and local governments. Securities generally must mature, or have an effective maturity, in 2036, generate interest exempt from federal income tax, and pay fixed amounts of interest.

Credit quality is another central requirement. Eligible bonds generally must be rated at least BBB- by S&P Global Ratings or Fitch Ratings, or Baa3 by Moody’s Ratings. Those thresholds correspond to the lower boundary of the investment-grade category. The index also uses minimum issue-size requirements, with eligible bonds generally requiring at least $15 million of face value outstanding when entering the universe. Existing index constituents may remain eligible at a lower continuing threshold, according to the prospectus.

The index can include callable, puttable and pre-refunded municipal securities. That feature makes the concept of “effective maturity” especially relevant because the contractual maturity date printed on a municipal bond does not always represent the date on which investors are likely to receive principal.

Callable bonds permit issuers to redeem securities before their stated maturity dates under specified conditions. In falling-rate environments, issuers can have an economic incentive to refinance higher-coupon obligations, potentially shortening the actual life of a security. The ICE BulletShares methodology therefore considers call structures and, in certain cases, treats the expected call year rather than the stated maturity year as the bond’s effective maturity. Pre-refunded securities can similarly be classified by their known pre-refunding date.

This methodology is intended to concentrate the portfolio’s economic maturity exposure around 2036 rather than merely collecting every security with “2036” printed as its contractual maturity. It also means that investors should not assume every bond held by BSMA will remain outstanding until the final calendar year. Calls, refundings and changes in index eligibility can remove securities earlier.

Before the final maturity year, qualifying securities in the ICE benchmark are generally market-value weighted, subject to an individual-issuer limit applied during monthly rebalancing. Invesco’s prospectus states that the issuer cap is 5%, a feature intended to constrain exposure to any single municipal borrower even when that borrower has a large amount of qualifying debt outstanding.

The benchmark was broad at launch. Invesco’s September prospectus reported that the ICE BulletShares Municipal Bond 2036 Index contained 1,735 constituents as of July 31, 2026. The large constituent count highlights one of the principal differences between using a defined-maturity ETF and constructing an equivalent municipal ladder bond by bond: the ETF can spread exposure across a much wider set of issuers and securities without requiring investors to source and trade hundreds of individual municipal issues.

BSMA is not required to purchase every index constituent in exact benchmark weight. Like many fixed-income ETFs, it can use representative sampling, selecting a portfolio intended collectively to resemble the investment characteristics of the underlying index. Sampling can reduce the operational complexity associated with less-liquid municipal securities, but it also introduces tracking risk because the portfolio and benchmark are not necessarily identical.

The fund has adopted a fundamental policy to invest at least 80% of its assets in municipal securities whose income is exempt from federal income tax. That tax treatment is a key element of the product’s intended role in taxable portfolios, particularly for investors who value federally tax-exempt income. Individual tax outcomes can still vary, however. State and local tax treatment depends on jurisdiction and the bonds held, while certain municipal income or transactions can create additional tax considerations for particular investors.

From an asset-allocation perspective, the introduction of a 2036 maturity point gives investors another way to manage duration deliberately. Someone building a ladder can allocate capital across consecutive BulletShares funds, allowing portions of the portfolio to approach maturity in different calendar years. As each fund terminates, the proceeds can be spent, moved into shorter-duration assets or reinvested at the far end of the ladder.

That framework can be particularly useful when investors are matching fixed-income assets to expected future liabilities. A household could align maturity years with anticipated spending requirements, while an adviser could use a rolling sequence of ETFs to manage annual liquidity for a client portfolio. Institutions and smaller advisory practices can also use defined-maturity funds when direct municipal portfolios would require operational resources or minimum trade sizes that are impractical.

The structure does not remove interest-rate risk. With roughly a decade remaining until 2036 at launch, BSMA’s market value can respond meaningfully to changes in municipal yields. If prevailing rates rise, existing bonds with lower coupons generally decline in price; if rates fall, existing bonds can appreciate, although municipal call features can limit upside as issuers refinance debt.

That sensitivity should gradually change as the fund approaches its terminal date. A central characteristic of a defined-maturity portfolio is that its remaining maturity declines naturally over time rather than being continuously extended. As a result, the fund’s interest-rate exposure should generally shorten as 2036 approaches, assuming its portfolio continues to follow the intended maturity profile.

The trade-off is reinvestment risk, especially near the end of the fund’s life. As securities mature or are called, the ETF may hold increasing amounts of shorter-term instruments, cash or other permitted assets rather than replacing those bonds with new long-duration 2036 issues indefinitely. The index stops adding constituents and rebalancing during its maturity year. That transition is necessary for the portfolio to move toward liquidation but can cause the fund’s yield and duration characteristics to differ materially from those at launch.

Municipal credit risk also remains relevant despite the investment-grade mandate. State and local government finances can be affected by tax collections, economic conditions, pension obligations, project performance, demographic changes and political or fiscal decisions. Revenue bonds may depend on specific enterprises or revenue streams rather than a government’s general taxing authority. Credit-rating requirements reduce but do not eliminate the possibility of deterioration or default.

Liquidity is another consideration. The municipal market is highly fragmented, with many individual securities trading less frequently than large Treasury or corporate issues. An ETF can provide investors with exchange liquidity at the share level, but the liquidity and pricing of underlying municipal bonds still influence portfolio trading costs, bid-ask spreads and tracking performance. Invesco’s prospectus notes that BSMA generally issues and redeems creation units principally for cash, which can lead the fund to incur costs when buying and selling securities.

Those characteristics make the 0.18% expense ratio only one component of the economic cost of holding the fund. Brokerage spreads, premiums or discounts to net asset value, portfolio trading costs and taxes where applicable can also affect realized returns. For a new ETF such as BSMA, secondary-market liquidity may take time to develop as assets, authorized-participant activity and trading volume build.

BSMA also arrives as defined-maturity fixed-income ETFs continue to broaden beyond corporate bonds. The format gives ETF issuers a way to bridge two investor preferences that historically required different products: diversified fund exposure and a specific maturity horizon. Municipal bonds are a natural application because tax-sensitive investors frequently construct ladders directly but face a market characterized by large numbers of individual securities, varying call provisions and uneven liquidity.

For Invesco, the 2036 municipal ETF extends a BulletShares platform that also covers investment-grade corporate, high-yield corporate and Treasury exposures across selected maturity years. Invesco describes the broader family as providing targeted fixed-income exposure with designated maturity dates, allowing investors to combine individual ETFs when building laddered portfolios.

The newest municipal fund also complements Invesco’s model-portfolio offerings built from BulletShares municipal ETFs. Those strategies use multiple maturity-specific funds to create managed ladders with different target ranges, illustrating how the individual ETFs can operate as portfolio components rather than standalone broad-market bond allocations.

The key investor question therefore is not simply whether BSMA offers municipal exposure, but whether a 2036-defined maturity fits the intended liability, duration and reinvestment schedule. Investors seeking a perpetual allocation to municipal debt may prefer broader funds that continuously maintain their maturity profile. Investors attempting to structure known maturity dates can instead use BSMA as one rung within a sequence of defined-maturity holdings.

Nasdaq’s listing of BSMA formalizes the next maturity year in that sequence. The ETF adds a 2036 endpoint while preserving the defining BulletShares mechanics: index-based investment-grade municipal exposure, a calendar-specific maturity profile, federal tax-exempt income as a core portfolio objective, and an eventual fund termination rather than perpetual reinvestment.

For investors using ETFs to build bond ladders, that extra year can be operationally significant. A ladder is maintained by extending its farthest maturity as nearer rungs roll off, and the availability of BSMA enables Invesco users to push municipal ladders one step farther into the future without leaving the same product family. The resulting portfolio still carries the familiar risks of municipal debt and exchange-traded funds, but it offers a defined structural feature that conventional open-ended bond funds do not: a planned conclusion in 2036.