State Street Global Advisors, the second-largest ETF provider in
the U.S. by assets under management, filed paperwork with U.S.
regulators to market three actively managed ultra-short bond funds
that would join the widely successful money-market-fund proxy Pimco
Enhanced Short Maturity Strategy ETF (NYSEArca:MINT).
SSgA's planned ETFs would invest in short-duration high-quality
debt consisting primarily of investment-grade fixed and floating
rate securities that include corporate and government debt of
varying maturities, the company said in the filing. Their goal is
to serve up current income as well as preservation of capital.
Ultra-short bond funds are a good proxy for money market funds,
although they can be riskier even if they still have minimal
sensitivity to interest-rate changes. They also often deliver
higher yields than money market funds, something that makes them
attractive in the current environment of near-zero interest
SSgA is the latest to target risk-averse investors' appetite for
income-generating strategies. Other fund providers like iShares and
AdvisorShares also have MINT-like ETFs in the regulatory pipeline.
MINT, which has an effective duration of one year, has gathered
more than $1.8 billion in 3 ½ years.
SSgA's planned funds include the following:
- The SPDR SSgA Ultra Short Term Bond ETF will have an
effective duration between three and nine months.
- The SPDR SSgA Conservative Ultra Short Term Bond ETF's
effective duration of the portfolio is pegged at four months or
- The SPDR SSgA Aggressive Ultra Short Term Bond ETF will have
an effective duration of six to 12 months.
The weighted average maturity-the U.S. dollar-weighted average
of the remaining term to maturity-is pegged at six to 18 months for
all the ultra-short and conservative funds, while the aggressive
strategy has an average of 1 ½ and 2 ½ years.
No tickers or fees were disclosed in the filing.
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