State Street Global Advisors, the investment management arm of State Street Corporation, and the largest institutional fund manager in the world, has launched the SPDR Lehman International
State Street Global Advisors, the investment management arm of State Street Corporation, and the largest institutional fund manager in the world, has launched the SPDR Lehman International Treasury Bond ETF, the first international bond exchange-traded fund available to US investors, on the American Stock Exchange.
Designed to provide precise, low-cost access to international fixed income, an asset class that has historically had a low correlation with US stock and bond markets, the SPDR Lehman International Treasury Bond ETF seeks to track the total return performance of the Lehman Brothers Global Treasury Ex-US Capped Index.
The index tracks the fixed-rate local currency sovereign debt of investment grade countries outside the US. At end of August, the index provided exposure to 674 issues from 18 countries denominated in 11 currencies.
‘This treasury bond ETF offers unmatched fixed income diversification that spans a wide range of developed and emerging countries,’ says James Ross, a senior managing director at State Street Global Advisors. ‘In addition to providing investors with an opportunity to react to interest rate movements overseas, the new ETF also can be used as a US dollar hedge.’
State Street says the ETF, which has an annual expense ratio of 0.5 percent, complements its growing family of fixed income ETFs. Last month it launched the SPDR Lehman Municipal Bond ETF, and in May added five SPDRs providing low-cost access to an array of fixed income segments and maturities.
State Street Global Advisors has managed fixed income index funds since 1984. The firm manages a total of more than USD222bn in fixed income globally and USD114bn in ETFs.
With USD1.9trn in assets under management at the end of June, State Street Global Advisors has investment centres in Boston, Hong Kong, London, Milan, Montreal, Munich, Paris, Singapore, Sydney, Tokyo and Zurich, and offices in 25 cities worldwide.