From the April 2009 issue of Research Magazine • Subscribe!

State Street Debuts Credit-Bond ETF

Adding to a string of new exchange-traded fund launches, State Street Global Advisors has introduced the SPDR Barclays Capital Intermediate Term Credit Bond ETF (ITR).

"With current yield spreads edging wider than they have been in more than 15 years, investment-grade corporate bonds are an attractive asset class for investors seeking to further diversify their fixed-income holdings or hedge against future interest-rate hikes," stated James Ross, senior managing director at State Street Global Advisors.

The fund's underlying index includes investment grade corporate and non-corporate credit bonds that are dollar denominated and have a remaining maturity of greater than or equal to 1 year and less than 10 years. As of December 31, 2008, the index included 2,512 issues with an average credit rating of A and dollar-weighted maturity of 5.20 years.

Explaining the offering, Ross said: "ITR was developed in response to increasing demand from investors seeking access to intermediate credit securities, a segment of the fixed-income market that has historically offered higher yields than U.S. Treasuries."

ITR's annual expense ratio is 0.15 percent. Including the launch of ITR, State Street now manages 15 bond ETFs.

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Ron DeLegge is the San Diego-based editor of www.etfguide.com.

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