The SPDR Blackstone/GSO Senior Loan exchange-traded fund has begun trading on the NYSE Arca.
Developed by State Street Global Advisors (SSgA) and GSO Capital Partners, the fund is the first actively managed ETF to provide exposure to senior loans.
“Given the high turnover of senior loans and the critical importance of credit selection, we believe an active strategy provides a key advantage to investors who want access to this corner of the market. Blackstone/GSO’s rigorous approach and disciplined credit analysis made them an obvious choice to help us bring this product to clients and we are excited about the partnership,” says James Ross (pictured), senior managing director and global head of SPDR ETFs at SSgA. “The SPDR Blackstone/GSO Senior Loan ETF is the latest example of our commitment to developing ETFs that democratise access to institutional asset classes, strategies and expertise.”
The ETF is designed to seek high current income, preserve capital, and outperform the Markit iBoxx USD Liquid Leveraged Loan Index and the S&P/LSTA US Leveraged Loan 100 Index. Usually rated below investment grade, it is typical in the loan market to expect that 30 to 35 per cent of loans will fall out of the index in any given year, so the ability to anticipate and react quickly to changes in the market through an active strategy is potentially advantageous.
“SSgA is a pioneer in the ETF market and we are pleased to join them in bringing the first actively managed senior loan ETF to investors,” says Lee Shaiman, managing director, The Blackstone Group. “Together we bring significant expertise to the asset class in a transparent and accessible product for all investors.”