State Street Global Advisors, the money manager behind the $10
billion SPDR Barclays High Yield Bond ETF (NYSEArca:JNK), filed
regulatory paperwork seeking permission to market an international
version of the successful flagship high-yield credit fund, the
latest addition to a growing franchise of junk
In a clear signal to investors, SSgA said in the paperwork that
the proposed SPDR Barclays International High Yield Bond ETF will
have a primary listing on the New York Stock Exchange's electronic
platform under the ticker "IJNK." It's not the first time the No. 3
U.S. ETF firm has riffed off the "JNK" ticker.The fund will hold
high-yield corporate credits from a variety of non-U.S.
About a year ago, it rolled out the SPDR Barclays Short
Term High Yield Bond ETF (NYSEArca:SJNK), a fund that cherry-picks
U.S. junk credits ranging from short-dated bills to notes that go
out five years on the high-yield corporate credit curve. That fund
now has nearly $1.5 billion-a clear success in such a limited
The success of JNK and SJNK and of junk funds from rival
sponsors-notably the nearly $14 billion iShares iBoxx $ High Yield
Corporate Bond Fund (NYSEArca:HYG)-speak to the quest for yield
among investors in the wake of the market crash of 2008-2009. That
said, outflows from funds like JNK have been accelerating amid
views the post-crash era of easy-money central bank policy might
The two funds' shares outstanding have dropped about 20 percent
since the end of 2012, with total outflows between the two funds of
more than $4 billion this year. JNK had $12.5 billion in assets at
the end of last year, compared with $10 billion currently. The drop
reflects outflows and price decline.
The new fund, IJNK, will track the Barclays Global ex US
Issuers High Yield Corporate Bond Index, and will use a sampling
strategy, meaning it doesn't have to own all the securities in the
index to achieve its objective.
State Street said in the filing it was reserving the right to
charge a 0.25 percent-a-year 12-b1 fee to help pay for costs to
market the fund, though the company said it was waiving that fee
for at least 12 months. That language recurs in a number of SSgA
fund filings, and doesn't suggest 12-b1 fees are in the works.
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