State Street Global Advisors (SSgA) has launched the SPDR Barclays Capital Issuer Scored Corporate Bond Exchange Traded Fund (ETF) (Symbol: CBND), which provides access to a new corporate bond indexing methodology. SSgA will soon launch its Issuer Scored Corporate Index Strategy to further enhance the firm’s fixed income offering, which includes more than USD3811 billion in assets globally.
Designed to provide an alternative to market value weighted index strategies, the SPDR Barclays Capital Issuer Scored Corporate Bond ETF (Symbol: CBND) seeks to track the performance of the Barclays Capital Issuer Scored Corporate Index. The Index includes publicly issued US dollar-denominated corporate issues that are rated investment grade and have USD250 million or more of par amount outstanding. Individual issuers in the Index are weighted using the following quantitative measures: return on assets, interest coverage and current ratio. Rebalancing based on these ratios occurs every six months on the last business day of March and September.
“Despite some compression in spreads over the past year, corporate credit remains a very attractive asset class for investors,” says Kevin Anderson, global chief investment officer for Fixed Income and Currency at State Street Global Advisors. “The SPDR Barclays Capital Issuer Scored Corporate Bond ETF and forthcoming SSgA Issuer Scored Corporate Index Strategy strengthen our fixed income offering by providing investors and advisors with solutions that address the concerns some have with the allocation of capital in existing corporate credit index strategies.”
The SPDR Barclays Capital Issuer Scored Corporate Bond ETF began trading on the NYSE Arca on April 7, 2011, and the SSgA Issuer Scored Corporate Index Strategy will soon be available to eligible institutional investors.
“The launch of the SPDR Barclays Capital Issuer Scored Corporate Bond ETF marks the start of a new chapter in fixed income investing,” says James Ross (pictured), senior managing director and global head of SPDR Exchange Traded Funds at State Street Global Advisors. “A testament to our commitment to developing innovative SPDR ETFs, CBND can help investors diversify their fixed income holdings with an indexing strategy that provides an effective, transparent means of capturing the sources of corporate bond returns.”