Bond ETFs Debut on Wall Street

October 8, 2007

SAN DIEGO (ETFguide.com) - As the exchange-traded fund (ETF) landscape continues to evolve, fixed income investors are getting more breadth and depth of choices.

State Street Global Advisors (SSgA) has introduced the SPDR Lehman International Treasury Bond ETF (Ticker: BWX).  The fund is the first international bond ETF available to U.S. investors.

The fund will track the Lehman Brothers Global Treasury Ex-US Capped Index which follows fixed-rate local currency sovereign debt of investment grade countries outside of the US. As of August 31, 2007, the Index provided exposure to 674 issues from 18 countries denominated in 11 currencies.

"The SPDR Lehman International Treasury Bond ETF offers unmatched fixed income diversification that spans a wide range of developed and emerging countries," said James Ross, senior managing director at State Street Global Advisors.  "In addition to providing investors with an opportunity to react to interest rate movements overseas, the SPDR Lehman International Treasury Bond ETF also can be used as a US dollar hedge."

The fund is listed on the American Stock Exchange (Amex) and it has an annual expense ratio of 0.50 percent.

In related news, Barclays Global Advisors (BGI) introduced two state specific iShares municipal bond ETFs.

The iShares S&P California Municipal Bond Fund (Ticker: CMF) and iShares S&P New York Municipal Bond Fund (Ticker: NYF) are also listed on the Amex and carry annual expense ratios of 0.25 percent.

These new munibond ETFs are a welcome mat for income investors in a market that’s traditionally been illiquid and expensive.

"We’re pleased to offer investors the first suite of municipal bond ETFs. The positive response to the iShares S&P National Municipal Bond Fund  (Ticker: MUB) demonstrates that investors value iShares’ low cost and tax efficiency, ease of trading and liquidity," said Noel Archard, Head of U.S. iShares Product Development.