SSgA Launches Two Corporate Bond ETFs
June 19, 2012
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State Street Global Advisors, the Boston-based company behind the first U.S. ETF “SPY,” today launched two corporate bond ETFs – one focused on a combination of U.S. investment-grade and high-yield credits and the other focused on investment-grade corporate debt from the emerging markets.
The two funds are, and their annual expense ratios are:
XOVR, the U.S.-focused fund, will compete for the same investors as the iShares Baa-Ba Corporate Bond Fund (BATS: QLTB), an ETF that also straddles the lower end of investment-grade debt and the higher end of high-yield debt. The iShares fund, which has $10 million in assets, also has an annual expense ratio of 0.30 percent.
The other SSgA fund focused on emerging markets corporate debt, EMCD, will compete with the WisdomTree Emerging Markets Corporate Bond Fund (NasdaqGM: EMCB). That WisdomTree fund blazed the trail in the developing world corporate bond ETF space. The WisdomTree fund, which has almost $60 million in assets, has an annual expense ratio of 0.60 percent.
All in all, State Street is jumping into a hotbed of the ETF world. iShares has rolled out a plethora of fixed-income funds this year – the clearest reflection that fund sponsors are confident investors are open to looking for yield in new places when official short-term interest rates in much of the developing world remained pinned down at historically low levels.