On Tuesday, Global X bolstered its fund lineup with the release of three new treasury ladder ETFs.
“With the launch of these Treasury ladder funds, Global X now proudly offers investors exposure across the yield curve,” noted Robert Scrudato, director of options and income research at Global X. “The Federal Reserve appears set to cut rates, and in such an environment, these ETFs may appeal to investors who are seeking periodic cash flows.”
The Ladder Strategy
Each of the three new Global X funds uses a Treasury Ladder strategy. These strategies involve building a portfolio of Treasury bonds, bills, and notes across a spread of maturities.
The Treasury securities are then placed in separate “rungs” in the portfolio’s ladder, based on maturity. Once a rung reaches its maturity, it gets rolled over into the next rung, creating cyclical and diverse Treasury exposure.
True to its name, the Global X Short-Term Treasury Ladder ETF (SLDR ) has the shortest ladder. The fund has two equally weighted rungs, with one holding maturities between one to two years, while the other rung focuses on two to three years.
Meanwhile, the Global X Intermediate-Term Treasury Ladder ETF (MLDR ) uses a portfolio with seven rungs. These rungs encompass a duration range of between three to 10 years.
Lastly, the Global X Long-Term Treasury Ladder ETF (LLDR ) focuses on the 10- to 30-year maturity range. Fitting for its size, LLDR’s portfolio has 20 rungs.
“With rate cuts imminent, many advisors are adjusting their fixed income exposure using ETFs,” noted Todd Rosenbluth, head of research at VettaFi. “It’s great to see Global X continue to grow its lineup.”
These three new ETFs come online as Global X continues to innovate and expand its robust ETF lineup. Global X currently has more than 90 ETFs available in the United States, representing over $48 billion in assets under management.
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