The BulletShares® Story
Accretive Asset Management LLC (AAM) created the BulletShares® fixed-income indexing methodology in response to feedback from financial advisors regarding the shortcomings of traditional bond mutual funds and ETFs. Many financial advisors derided traditional bond mutual funds and ETFs as “exposure vehicles” and expressed a preference for certain features of individual bonds, particularly the return of principal upon maturity.
In developing BulletShares® Indices, AAM sought to create an index methodology that could serve as the basis of investment products that combine the best attributes of both individual bonds and bond funds. This meant developing an index methodology that would permit the creation of diversified, low-turnover portfolios while providing predictable cash flows and a maturity date. To accomplish this, AAM developed the concept of the maturity-targeted bond index. By creating a separate index for each year of maturity and then keeping every bond in the index until maturity (unless it fails to meet other index criteria), BulletShares® Indices allow for the creation of bond funds that have cash flow profiles similar to that of an individual bond, with the added benefit of increased diversification.
Since the launch of the first ETFs based on BulletShares® Indices on June 7, 2010, investors have adopted this new approach to fixed-income investing in steadily increasing numbers. As of January 31, 2012, BulletShares® Indices were licensed to 10 NYSE Arca-listed ETFs with more than $839 million in assets under license, representing an increase of more than 572% since December 31, 2010.
Investors are rapidly adopting BulletShares® Indices1
