At a glance
BSMQ charges 0.18% a year, above the 0.14% average of the 7 funds most like it (the 5th cheapest of 8). It has $268.5M in assets, the 8th largest of that group; it paid 2.73% of its price in distributions over the past 12 months, monthly. Over the past year it returned +2.1% with distributions reinvested, 2nd of those 8 funds; over three years it returned +3.7% a year. At its worst it fell 13.4% in the 2020 crash (S&P 500: 33.7%) and 10.8% in the 2022 bear market (S&P 500: 24.5%), and was back at its earlier high 8 months and 35 months after the lows. Its ten largest positions make up 6.3% of the fund, out of 1,269 in all.
The short version
Invesco BulletShares 2026 Municipal Bond ETF (BSMQ) holds investment-grade municipal bonds that are exempt from federal income tax and that mature, or are expected to be called early, in 2026. Unlike most bond funds, it has an end date. It is scheduled to close on or about December 15, 2026 and pay out its net assets in cash. Its 0.18% expense ratio is above the 0.14% average for similar muni funds.
Price history
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BSMQ +2.1% over the year to Oct 27, 2026, total return with distributions reinvested.
How it has behaved
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | Since start | |
|---|---|---|---|---|---|---|
| BSMQ official prospectus, to Dec 31, 2024 | — | +2.27% | — | +0.73% | — | +0.77% |
| BSMQ price data to Oct 27, 2026 | +1.5% | +2.1% | +3.7% | +0.5% | — | +1.2% |
- Over the year to Oct 27, 2026, BSMQ returned +2.1%, 2nd of 8 among similar funds.
- Its 5-year annualized return was +0.5%.
- In the 2020 COVID crash it fell 13.4% and regained its old high 8.3 months after the low.
- Its worst full calendar year was 2022 (-7.6%); its best was 2020 (+5.1%).
- The deepest fall in its price history was 13.4% (Mar 10, 2020 to Mar 23, 2020), recovered by Nov 30, 2020.
Show as a table
| Year | Price data | Prospectus (official) |
|---|---|---|
| 2026 (to date) | +1.5% | — |
| 2025 | +3.1% | — |
| 2024 | +2.0% | +2.27% |
| 2023 | +3.6% | +3.46% |
| 2022 | -7.6% | -7.69% |
| 2021 | +1.0% | +1.07% |
| 2020 | +5.1% | +5.06% |
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Before this security existed |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Lost 11.5% over that stretch · deepest drop along the way 13.4%, back to its old high 8.3 months after the low |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Lost 9.7% over that stretch · deepest drop along the way 10.8%, back to its old high 35.4 months after the low |
Dividends and income
Show as a table
| Year | Per share | Change |
|---|---|---|
| 2026 (to date) | $0.5400 | |
| 2025 | $0.6400 | -1.5% |
| 2024 | $0.6500 | +10.2% |
| 2023 | $0.5900 | +59.5% |
| 2022 | $0.3700 | +29.3% |
| 2021 | $0.2861 | -22.6% |
| 2020 | $0.3698 |
What's inside
As of Aug 31, 2026, the fund held 1,269 securities; the ten largest made up 6.32% of assets.
| Holding | Weight | |
|---|---|---|
| Idaho Health Facilities Authority Bonds and notes | 1.29% | |
| New York City Municipal Water Finance Authority Bonds and notes | 0.95% | |
| Charlotte-Mecklenburg Hospital Authority (The) (Atrium Health) Bonds and notes | 0.69% | |
| Maryland (State of) Department of Transportation Bonds and notes | 0.56% | |
| New Jersey Health Care Facilities Financing Authority Bonds and notes | 0.52% | |
| Connecticut Housing Finance Authority Bonds and notes | 0.50% | |
| Charlotte-Mecklenburg Hospital Authority (The) Bonds and notes | 0.48% | |
| Minnesota (State of) Public Facilities Authority Bonds and notes | 0.47% | |
| Public Building Authority of Blount County Tennessee (The) Bonds and notes | 0.45% | |
| Illinois (State of) Toll Highway Authority Bonds and notes | 0.42% | |
| Chicago (City of), IL Metropolitan Water Reclamation District Bonds and notes | 0.41% | |
| Metropolitan Transportation Authority Bonds and notes | 0.41% | |
| Charlotte-Mecklenburg Hospital Authority (The) (Carolinas Health Care Systems) Bonds and notes | 0.39% | |
| County of Utah UT Bonds and notes | 0.39% | |
| Columbus (City of), OH Bonds and notes | 0.38% |
By country
United States 88.16%By issuer
Municipalities 88.16%The bonds mature in 6.3 years on average (weighted by size), with an average coupon of 4.05%.
Source: N-PORT holdings report as of Aug 31, 2026. Cash, money-market funds and derivatives are shown separately from the securities list.What changed recently
- Over the three months to Aug 31, 2026, investors withdrew a net $25.9M (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: +0.27%, +0.07%, +0.24%.
How it works
BSMQ tracks the Invesco BulletShares Municipal Bond 2026 Index. The index holds municipal bonds from US states, cities and agencies that mature in 2026. Each must pay fixed, federally tax-free interest, be rated investment grade (BBB-/Baa3 or better) and have at least $15 million outstanding. Callable bonds, which issuers can repay early, count if likely to be redeemed in 2026. Larger issues, by market value, get more weight, with each issuer capped at 5% at monthly rebalances. The fund owns a representative sample, not every bond.
BSMQ has an end date. In its final year (2026), the index adds no new bonds and stops rebalancing. As bonds mature or are called, proceeds go into short-term holdings such as variable rate demand obligations (municipal debt whose rate resets often), money market funds and cash. The largest holding as of August 31, 2026 was a variable rate demand bond from the Idaho Health Facilities Authority, at 1.3% of assets. The fund's yield tends to drift toward cash rates.
The fund is set to close on or about December 15, 2026, though its board can change the date. It then pays out remaining net assets in cash. Unlike a single bond, neither monthly income nor that final payout is fixed in advance.
What it really costs
- BSMQ charges 0.18% a year, versus an average of 0.14% for the similar funds below (5th of 8, cheapest first).
- Using the prospectus's standard example, $10,000 invested would cost about $18 in the first year and $229 over 10 years (assuming a 5% annual return).
| Cost of $10,000 (SEC example) | 1 yr | 3 yrs | 5 yrs | 10 yrs |
|---|---|---|---|---|
| BSMQ | $18 | $58 | $101 | $229 |
Structure and tax notes
- Bond prices move opposite to interest rates; the longer the maturities it holds, the more its price reacts to rate changes.
In a retirement portfolio
It holds short-dated, investment-grade, tax-exempt bonds that turn into cash as the fund nears its scheduled close on or about December 15, 2026.
BSMQ can act like a dated pot of tax-exempt bonds for money set aside for late 2026. It is not a long-term holding. It launched in September 2019, so it has no record from 2008. In the 2020 COVID crash it fell 13.4% between March 10 and March 23, 2020, then recovered by November 30, 2020. In 2022 it dropped 10.8% and took 35.4 months to get back to its earlier peak, on September 12, 2025. Its worst calendar year was 2022, at -7.69%. Anyone who needed to cash out during those dips would have taken a loss. The fund paid income monthly, and its trailing 12-month yield was 2.73% as of October 27, 2026. That yield tends to drift toward cash rates in the final year. In the SEC's standard example, the fund costs $18 for the first year on $10,000. Past results don't predict future returns, and a plan should look at the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- Investors who want federally tax-exempt muni income with a known end date, with cash paid out on or about December 15, 2026.
- People who want wide spread across 1,269 municipal positions, where the top ten made up only 6.32% of assets as of August 31, 2026.
- Those holding cash for a late-2026 need who accept a yield that moves toward money market rates as bonds mature.
Look elsewhere if
- Anyone wanting a muni fund to hold for years. BSMQ closes in December 2026, while open-ended funds such as SHM keep reinvesting.
- Cost-focused investors. BSMQ's 0.18% fee is above the 0.14% peer average and well above iShares Short-Term National Muni Bond ETF's 0.07%.
- Investors counting on state tax exemption. The prospectus warns that the fund's income may not be exempt from state, or even federal, income tax.
Close alternatives
Matched by bond funds with the closest average maturity and issuer mix (N-PORT).
| Fund | Avg. maturity | Cost | Net assets | 1 yr | 3 yr |
|---|---|---|---|---|---|
| BSMQ this fund | 6.3 yrs | 0.18% | $268.5M | +2.1% | +3.7% |
| SHM SPDR Nuveen Bloomberg Short Term Municipal … | 6.2 yrs | 0.2% | $3.47B | +1.2% | +3.3% |
| DFNM Dimensional National Municipal Bond ETF | 8.8 yrs | 0.17% | $2.24B | +0.7% | +3.6% |
| SUB iShares Short-Term National Muni Bond ETF | 3.3 yrs | 0.07% | $11.64B | +2.1% | +3.3% |
| JMST JPMorgan Ultra-Short Municipal Income ETF | 2.7 yrs | 0.18% | $7.36B | +2.5% | +3.3% |
| CMF iShares California Muni Bond ETF | 12.4 yrs | 0.08% | $4.63B | -0.6% | +3.8% |
| MUB iShares National Muni Bond ETF | 13.5 yrs | 0.05% | $45.38B | -0.2% | +3.7% |
| MEAR iShares Short Maturity Municipal Bond Activ… | 13.1 yrs | 0.25% | $1.36B | +1.9% | +3.3% |
Questions investors ask
What happens when BSMQ matures?
BSMQ is scheduled to close on or about December 15, 2026, though its Board can change that date. After setting aside money for any liabilities, the fund pays its net assets in cash to whoever holds shares at that point. The amount isn't fixed in advance. It depends on how the bonds and short-term holdings performed. During 2026, money from maturing bonds has gone into cash-like holdings rather than new 2026 bonds.
Is BSMQ income tax-free?
Mostly from federal income tax, but there is no guarantee. The index only includes bonds that are exempt from federal income tax. However, the prospectus warns that a bond's tax status can be changed later, sometimes back to the date it was issued. It also says there's no guarantee the income will be free of state taxes. As the fund shifts into cash-like holdings near its close, its mix of income may change.
Does BSMQ pay monthly dividends?
Yes. BSMQ pays distributions monthly. The trailing 12-month yield was 2.73% as of October 27, 2026, or about $0.64 per share. Monthly payouts change over time. In the fund's final year, the prospectus says the yield will generally move toward cash rates as bonds mature. That means it may fall below the yields of the bonds the fund held earlier.
BSMQ vs SHM: what's the difference?
Both hold short-dated municipal bonds. SPDR Nuveen Bloomberg Short Term Municipal Bond ETF (SHM) is the closest match by maturity and issuer mix. The key difference is that SHM has no end date, while BSMQ closes in December 2026. SHM charges 0.20% to BSMQ's 0.18%, and it is much larger: $3.47 billion as of June 30, 2026, against $268 million. As of October 27, 2026, BSMQ returned 2.1% over one year, compared with 1.2% for SHM.
Can you lose money in BSMQ?
Yes. BSMQ fell 7.69% in 2022 as interest rates rose. Bond prices fall when rates go up. From January to September 2022 it dropped 10.8% and needed 35.4 months to recover. In March 2020 it briefly fell 13.4%. Its value can also suffer if a municipal issuer runs into trouble. The fund does not promise to return a set amount when it closes.