On Tuesday, State Street Global Advisors added the SPDR Portfolio Treasury ETF (SPTB ) to its growing fund library.
SPTB aims to produce results that generally match the price and yield performance of the Bloomberg U.S. Treasury Index. The fund operates with a low expense ratio of 0.03%.
“With the addition of SPTB, our low-cost SPDR Portfolio suite now offers investors a complete set of cost-effective tools to disaggregate the Bloomberg U.S. Aggregate Bond Index by sector as well as maturity,” added Allison Bonds Mazza, Head of Intermediary at State Street Global Advisors.
The Bloomberg U.S. Treasury Index is utilized to measure the U.S. dollar-denominated, fixed-rate, nominal debt released through the U.S. Treasury. In particular, this index is comprised of investment grade U.S. Treasury securities with a remaining maturity of one year or above. These securities must be fixed rate, not convertible, and denominated in U.S. dollars.
Investment Strategy
To provide similar results to the index, SPTB utilizing a sampling strategy. The exact extent of holdings within SPTB are measured through a number of factors, including the total asset size of the fund.
After evaluating all potential factors, the fund prospectus notes that SPTB may allocate assets towards a subset of securities within the index. Alternately, the fund may instead invest in a substantial majority of securities within the index, at the same approximate proportions.
The wide majority of assets within the fund will be allocated to either securities within the index or securities with similar economic characteristics. To better track the index, SPTB may also invest in debt securities that are outside the index.
SPTB may also invest in a smaller portion of instruments in order to benefit cash management. These options include cash and cash equivalents, along with money market instruments.
“We’re seeing growing advisor adoption of fixed income ETFs in 2024. It’s great to see State Street Global Advisors further expand their strong lineup of low-cost products to support asset allocation objectives,” added Todd Rosenbluth, VettaFi Head of Research.
Currently, State Street Global Advisors has over 130 ETFs listed in the United States. In total, these funds represent over $1.2 trillion in assets under management.
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