On Wednesday, State Street Global Advisors, the asset management business of State Street Corporation (NYSE: STT), announced the launch of the SPDR Bloomberg Barclays Emerging Markets USD Bond ETF (EMHC). The fund was developed to provide exposure to US dollar-denominated debt issued by sovereign and quasi-sovereign emerging market issuers.
EMHC may provide investors with an attractive source of income and diversification benefits due to emerging markets debt’s low historical correlation to other global bond sectors.
“With yields relatively low across US bond markets, investors are increasingly looking elsewhere to generate income,” said Sue Thompson, head of SPDR Americas Distribution at State Street Global Advisors. “Emerging market debt has seen solid growth over the last decade. However, we believe many investors may be under-allocated to this asset class. EMHC provides a convenient and cost-effective means to access emerging market debt while guarding against short-term fluctuations in the dollar.”
EMHC seeks to track the Bloomberg Barclays Emerging USD Bond Core Index. This index measures the performance of fixed-rate US dollar-denominated debt issued by sovereign and quasi-sovereign (government-owned and government-guaranteed) emerging market issuers.
It includes bonds with a minimum par outstanding amount of $500 million, a remaining maturity of at least two years, and an original maturity of greater than five years. Bonds rated Caa3/CCC-/CCC- or lower or Aa3/AA-/AA- or higher by any of Moody’s Investors Service, Inc., Standard & Poor’s Financial Services, LLC, and Fitch Inc., respectively, are excluded from the Index.
“The SPDR Bloomberg Barclays Emerging Markets USD Bond ETF complements our existing lineup of emerging market debt ETFs, which includes the SPDR Bloomberg Barclays Emerging Markets Local Bond ETF (EBND) and the actively managed, SPDR DoubleLine Emerging Markets Fixed Income ETF (EMTL),” said Noel Archard, global head of SPDR product at State Street Global Advisors. “EMHC meets demand from clients who are attracted to the benefits of emerging market debt but concerned about the potential impact of local currency depreciation.”
SPDR ETFs are a comprehensive family spanning an array of international and domestic asset classes. SPDR ETFs are sponsored by affiliates of State Street Global Advisors.
For more information on the SPDR ETF suite, visit www.ssga.com/etfs.
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