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State Street launches convertible bond exchange-traded fund

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State Street Global Advisors, the investment management arm of State Street Corporation, has announced the launch of the SPDR Barclays Capital Convertible Bond ETF on NYSE Arca, which t

State Street Global Advisors, the investment management arm of State Street Corporation, has announced the launch of the SPDR Barclays Capital Convertible Bond ETF on NYSE Arca, which the company says is the first convertible bond ETF available to US investors.

The SPDR Barclays Capital Convertible Bond ETF seeks to track the price and yield performance of the Barclays Capital US Convertible Bond >USD500MM Index. Convertible bonds are bonds that can be exchanged, at the option of the holder, for a specific number of shares of the issuer’s preferred or common stock.

As of 31 December 2008, 156 issues were included in the Convertible Index. The fund’s expense ratio is 0.40 per cent.

‘Offering a unique risk-return profile that combines the yield of corporate bonds with the capital appreciation potential of stocks, convertible bond exposure is experiencing increased demand as investors look to improve the diversification of their portfolios,’ says James Ross, senior managing director at State Street Global Advisors (pictured).

‘As the first ETF to provide exposure to the benefits of convertible bonds, the SPDR Barclays Capital Convertible Bond ETF underscores our commitment to develop innovative ETFs for investors seeking precise access to all segments of the market.’

State Street Global Advisors has managed fixed-income index funds since 1984.

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