Credit and Bond Markets Team Up in New ETF | ETF Trends

State Street is adding another SPDR to their family of exchange traded funds (ETFs) and attempts to keep their fair share of the industry, while upping the ante for the competition.

The new ETF is SPDR Barclays Captial Intermediate Term Credit Bond ETF (ITR) and it has an expense ratio of 0.15%.  The index it tracks is made up of publicly-issued, investment-grade, U.S. corporate and specified foreign debentures and secured notes; bonds must have a 1-10 year in maturity rate, and must be registered with the Securities and Exchange Commission (SEC). According to the State Street fact page, The index includes both corporate and non-corporate sectors. The corporate sectors are Industrial, Utility, and Finance, which include both U.S.-based and non-U.S. corporations.

This ETF is intended to capture the wide spreads between credit bonds and U.S. Treasury securities, as yields are at an all-time high. ITR gives direct exposure to intermediate duration targets through maturities greater than or equal to one year and less than 10 years. Plus, the ETF’s strucure gives the transparency, liquidity and cost efficiency expected from an ETF.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.