State Street Introduces Fixed Income ETFs

The SPDR Barclays Capital Short Term Treasury ETF is designed to track the performance of the Barclays Capital 1-5 Year U.S. Treasury Index. The Index includes all publicly issued U.S. Treasury securities that have a remaining maturity of greater than or equal to one year and less than five years, are rated investment grade and have $250 million or more of outstanding face value.  As of November 18, 2011, there were approximately 114 securities included in the Index with an average maturity of 2.8 years. The SPDR Barclays Capital Short Term Treasury ETF’s expense ratio is 0.12%.  

The SPDR Barclays Capital Investment Grade Floating Rate ETF is designed to track the performance of the Barclays Capital U.S. Dollar Floating Rate Note  5 Years Index. The Index includes U.S. dollar-denominated, investment grade floating rate notes that have a remaining maturity of greater than or equal to one month and less than five years, and have $300 million or more of outstanding face value.  As of November 18, 2011, there were approximately 320 securities in the Index with an average maturity of 1.71 years. The SPDR Barclays Capital Investment Grade Floating Rate ETF’s expense ratio is 0.15%.  

Floating rate notes, which are often referred to as “FRNs” or “floaters,” are debt issues with variable coupon payments that are based on a reference rate, such as 3-month LIBOR with a fixed spread, the company explained. Coupons are reset periodically and can rise or fall with changes in the reference rate while the spread remains constant.