iShares Files For Active Currency ETFs, State Street Plans Active Bond Funds

by on August 10, 2012

Stocks have been quietly drifting higher all week as low trading volumes and no major economic data releases paved the way for the bulls. With unresolved eurozone debt drama looming in the background, investors should keep a close watch on overseas developments as another round of selling can easily erase all of optimism building on Wall Street without notice. Although this week was fairly uneventful for stock markets, activity on the product development front was quite robust with two industry giants filing for a slew of actively-managed ETFs [see also Bill Gross: Inflation Coming Soon to a Developed Country Near You]. 

Veteran iShares has filled the pipeline with over a dozen single-currency ETFs; each of the proposed funds will be actively managed with a goal of delivering price and yield performance that compares to holding a foreign currency in a bank account. The proposed ETFs will accomplish their objective by holding U.S. dollar-denominated short-term fixed income securities and spot foreign exchange currency contracts in a balance that offers exposure equivalent to holding the actual foreign currency itself [see SEC Filing].

The iShares ETFs will be designed to provide exposure to the daily returns of each specific currency versus the U.S. dollar, as well as the yield of that currency [see also For ETF Investors, Currency Exposure Matters]:

  • Australian Dollar Cash Rate Fund
  • Singapore Dollar Cash Rate Fund
  • Swedish Krona Cash Rate Fund
  • Swiss Franc Cash Rate Fund
  • Thai Offshore Baht Cash Rate Fund
  • Turkish Lira Cash Rate Fund
  • British Pound Cash Rate Fund
  • Canadian Dollar Cash Rate Fund
  • Chinese Offshore Renminbi Cash Rate Fund
  • Euro Cash Rate Fund
  • Japanese Yen Cash Rate Fund
  • Mexican Peso Cash Rate Fund
  • New Zealand Dollar Cash Rate Fund
  • Norwegian Krone Cash Rate Fund
Boston-based State Street is planning to beef up its lineup of fixed-income products with three actively-managed money market ETFs. The proposed State Street ETFs will invest in short-duration investment-grade fixed and floating rate securities, covering both corporate and government debt with a goal of capital preservation and steady current income [see also Bond ETFs For Every Objective]:
  • SPDR SSgA Ultra Short Term Bond ETF: This ETF will have an effective duration between three and nine months. 
  • SPDR SSgA Conservative Ultra Short Term Bond ETF: This ETF will have an effective duration of four months or less.
  • SPDR SSgA Aggressive Ultra Short Term Bond ETF: This ETF will have an effective duration between six and twelve months. 

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Disclosure: No positions at time of writing.