State Street Launches ETFs for Building Bond Ladders
The corporate and municipal "target maturity" ETFs are the first on the market, State Street says.
State Street Global Advisors this week introduced what it called the first actively managed corporate and municipal target maturity bond exchange-traded funds in the U.S. market — its SPDR SSGA MyIncome ETFs lineup.
The suite of 14 actively managed target maturity ETFs, with maturity years ranging from 2026 to 2034, seeks to provide investors the ability to build custom bond ladder portfolios to manage their cash flow, interest rate risk and liquidity needs.
“Fixed income investors have been enjoying the highest interest rates seen in decades, but many are wondering how they can protect against the potential for precarious rate fluctuations ahead,” said Anna Paglia, State Street Global Advisors’ chief business officer.
During times of interest rate uncertainty, clients often ask how they should invest if interest rates go down and what changes they should make to their fixed income allocations, the firm noted.
These questions can especially interest retirees who aim to preserve capital while withdrawing assets, State Street said.
“Building a bond ladder by investing in target maturity ETFs is potentially helpful for retirees seeking predictability as they plan for the next chapter of their retirement years, without having to manage a portfolio of individual bonds,” Paglia added.
The suite, which includes corporate bond and municipal bond ETFs, will be managed by State Street Global Advisors’ active fixed income portfolio management team.
Expense ratios are 0.15% for the corporate bond ETFs and 0.15% for the municipal bond ETFs.
Credit: Chris Nicholls/ALM