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November 01, 2009 at 02:00 AM
It was a busy third quarter for ETF providers, as they introduced new products to meet market demand and round out their fund lineups.
State Street Global Advisors introduced the SPDR Wells Fargo Preferred Stock ETF (PSK) and the SPDR S&P VRDO Municipal Bond ETF (VRD). PSK is linked to the Wells Fargo Hybrid and Preferred Securities Aggregate Index, which includes around 160 securities.
PSK’s underlying index includes non-convertible preferred securities listed on the NYSE or NYSE Arca that have a par amount of $25, are rated investment grade by Moody’s or Standard & Poor’s and have a minimum monthly trading volume during each of the past six months of at least 250,000 trading units.
“The SPDR Wells Fargo Preferred Stock ETF provides financial advisors and investors with improved access to the benefits of this unique asset class, which include high yields and a low correlation to both bonds and common stock,” said Anthony Rochte, senior managing director at State Street Global Advisors. PSK’s annual expense ratio is 0.45 percent.
Another newly launched ETF is the SPDR S&P VRDO Municipal Bond ETF (VRD). The fund provides access to municipal variable rate demand obligations (VRDOs), an asset class offering attractive yields and stable income that is exempt from federal taxes and often state and local income taxes as well.
VRD is benchmarked to the price and yield performance of the S&P National AMT-Free Municipal VRDO Index. As of September 21, the index (which includes VRDOs issued by states, local governments and other agencies) provided exposure to more than 377 issues.
