October 13, 2009 at 2:00 pm by Tom Lydon
The exchange traded fund (ETF) bond market has been growing rapidly, and both iShares and Grail Advisors are contributing to yet more of this growth with a few filings with the Securities and Exchange Commission (SEC).
The SEC has filings on hand for three new bond-focused ETFs.
Grail Advisors has filed to launch another actively managed ETF, the RP Short Duration ETF. This filing comes on the heels of the firm filing for two other active bond ETFs and after launching four equity ETFs. (Read about why bond ETFs are still so popular here).
Meanwhile, iShares has filed to launch two new bond ETFs:
- iShares 10+Year Credit Bond Fund (NYSEArca: CLY)
- iShares 10+ Year Government/Credit Bond Fund (NYSEArca: GLJ)
GLJ will track the long-term, investment-grade U.S. and corporate government bond markets.
CLY will buy both U.S. corporate bonds and so-called Yankee bonds, which are dollar-denominated bonds issued by foreign companies and governments. Yankee bonds are linked to U.S. instead of foreign interest rates.
Cinthia Murphy for Index Universe explains that there are three key reasons investors like Yankee bonds:
- They are regulated by the SEC
- They offer a risk premium over U.S. shares
- They’re rated by U.S. ratings agencies such as Moody’s and Standard & Poor’s; most internationally listed bonds are not
Both funds will have an expense ratio of 0.2%.
For more stories about bond ETFs, visit our bond ETF category.
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