State Street Global Advisors Launches 11 SPDR ETFs on the Deutsche Börse Xetra

The funds allow investors greater freedom in selecting which segments of the yield curve they wish to hold. This flexibility is crucial – particularly at a time of tightening Federal Reserve monetary policy – as choosing whether to invest across the entire yield curve or only in certain segments can have a notable impact on portfolio returns.

For example, from 1995 - 2015 the Barclays US Treasury (UST) index returned 217 percent, but with significant variability across the curve; the 1-3 year index returned 125 percent, while the 10-year plus index returned 410 percent. A similar pattern was observed in the Eurozone government bond market. From the creation of the single currency to the end of 2015 the Barclays Euro Treasury index returned 126 percent, compared to just 72 percent for the one to three year index and more than 195 percent for the 10-year plus index [1].

Alexis Marinof, EMEA head of SPDR ETFs commented, “We are in a ‘lower for longer’ economic environment with low growth, subdued inflation, and limited global policy tightening all on the cards. In addition to this, regulatory requirements continue to drive cost pressures. Against this backdrop, investors understandably remain focused on seeking ways to make their portfolios as efficient as possible, and low cost, easy-to-use ETFs are the natural choice. Total global Exchange Traded Products assets surpassed $3 trillion for the first time last year [2]. This growth is testament to how the beneficial characteristics of ETFs complement today’s investment environment.”

Marinof continued, “We are proud innovators in fixed income ETFs, having launched six firsts [3] to the European market, including our EM Local Currency ETF and Global Convertibles ETF. Whilst we continue to help investors gain exposure to more complex and hard to access segments of the market, these latest launches support their demand for low cost solutions for their core portfolio. Year-on-year flows into fixed income ETFs/ETPs globally have totaled close to $81 billion [4] with assets reaching almost $510 billion a trend we expect to continue.”

SSGA is one of the leading ETF providers in the world and comprises 89 ETFs in Europe for a total of $14 billion in assets under management (AUM). SSGA has managed indexed fixed income for more than 30 years, and has $332 billion in fixed income AUM [5], across aggregate, government, credit, MBS, emerging markets, inflation-linked and high yield. SPDR ETF UCITS fixed income products now number 35 in total.