SSgA launches SPDR Barclays Capital Short Term High Yield Bond ETF

Mar 16th, 2012 | By | Category: Fixed Income

State Street Global Advisors (SSgA) has announced the launch of the SPDR Barclays Capital Short Term High Yield Bond ETF (SJNK) on the NYSE Arca.

SSgA launches SPDR Barclays Capital Short Term High Yield Bond ETF

State Street has announced the launch of the SPDR Barclays Capital Short Term High Yield Bond ETF on NYSE Arca.

The new SPDR ETF offers investors access to high-yield corporate bonds with short durations, which tend to be less volatile and sensitive to changes in interest rates than debt securities with longer durations. The fund’s annual Total Expense Ratio (TER) is 0.40%.

The SPDR Barclays Capital Short Term High Yield Bond ETF seeks to track the performance of the Barclays Capital 0-5 Cash Pay Constrained High Yield Index.

This index includes publicly issued US dollar-denominated, non-investment-grade, fixed rate, taxable corporate bonds that have a remaining maturity of less than five years, are rated high-yield (Ba1/BB+/BB+ or below) using the middle rating of Moody’s, Fitch or Standard & Poor’s, and have $350 million or more of issuance.

As of 16 March, 2012, there are 81 holdings in the fund with an average modified adjusted duration of approximately 2.34 years. The average maturity is 3.48 years and the current yield is 7.77%. The top five names currently are AES Corporation, Chesapeake Energy, Ford Motor Credit, Mohawk Industries and Offshore Group Investment.

James Ross, senior managing director and global head of SPDR ETFs at SSgA, said: “Offering equity-like returns with less volatility, demand for high-yield bond exposure is on the rise. The launch of the SPDR Barclays Capital Short Term High Yield Bond ETF provides investors and advisers with an opportunity to gain cost efficient access to short-term high-yield bonds, a segment of the high-yield market that can help to protect against an inevitable rise in interest rates.”

The launch of SJNK enhances SSgA’s fixed income ETF offering, which is now comprised of 34 SPDR ETFs, including the SPDR Barclays Capital High Yield Bond ETF (JNK), a high-yield bond fund with a longer maturity profile SJNK.

SSgA manages more than $274 billion in SPDR ETF assets worldwide (as of December 31, 2011) and is one of the largest ETF providers globally.

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