State Street launches further short-maturity bond fund

ETF tradingState Street Global Advisors (SSGA) has launched another short-maturity bond exchange-traded fund (ETF) against a background of interest rate uncertainty.

Under its SPDR ETF brand, SSGA has launched the SPDR Barclays 0–5 Year Sterling Corporate Bond Ucits ETF on the Deutsche Börse, Xetra.

The fund is part of a short-maturity range of products that includes a recently launched fund investing in US corporate bonds with maturities of 0-3 years.

Eleanor Hope-Bell, head of SPDR UK at SSGA, says: “In the current environment, with speculation growing that the interest rates cycle is turning, short-maturity ETFs should be a useful tactical tool, allowing investors to earn yield while remaining flexible.”

Short maturity ETFs can be used to over of underweight specific regions and currencies and build more bespoke exposures across the yield curve. Short maturity corporate indices tracked by SPDR ETFs hold all bonds until maturity, which has the effect of lowering duration and portfolio turnover while maintaining diversification.

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