State Street Global Advisors, the company behind the worldâs two-biggest ETFs, filed paperwork with the Securities and Exchange Commission to market a floating-rate ETF, bringing SSgA up to speed with a broad trend in the exchange-traded funds world involving some of the ETF industryâs biggest names.
The SPDR Barclays Capital Investment Grade Floating Rate ETF will be designed around a benchmark that tracks an index of U.S.-dollar-denominated, investment-grade floating-rate notes with maturities greater than or equal to one month and less than five years, according to the filing.
The focus on investment-grade debt appears to put the SSgA product on par with the Market Vectors Investment Grade Floating Rate ETF (NYSEArca:FLTR) from Van Eck, which has gathered $9.6 million since its launch in the spring. Indeed, floating-rate bonds are often linked to borrowers that are highly leveraged, as they are issued for recapitalization needs and acquisitions, such as leveraged buyouts.
The floating-rate debt ETF trend began in earnest in early March with the launch of the PowerShares Senior Loan Portfolio (NYSEArca:BKLN). BKLN, which has gathered almost $160 million, holds noninvestment-grade bank loans.
After Van Eckâs FLTR, San Francisco-based iShares followed with the iShares Floating Rate Note Fund (NYSEArca:FLOT), which has gathered $64.2 million.
SSgA didnât say what the floating-rate ETFâs ticker would be or what its annual expense ratio would be.
SSgA is the fund sponsor behind the nearly $93 billion SPDR S'P 500 ETF (NYSEArca:SPY) and the $72 billion physical bullion ETF, the SPDR Gold Shares (NYSEArca:GLD).
Copyright ® 2011 IndexUniverse LLC . All Rights Reserved.