Market volatility appears to be driving investors towards bond exchange traded funds (ETFs) as providers launch new fixed-income products and bring down the prices of existing funds.
State Street has listed 11 new fixed-income ETFs on the London Stock Exchange offering exposure to US treasury, euro government and US corporate bonds across the yield curve. The range enables investors to select bonds maturing at different dates: longer-dated bonds for a higher income and shorter-dated ones at the lower end of the yield curve for lower interest rate risk and lower volatility.
It follows a move by Lyxor earlier this month to cut fees on its bond ETFs, slashing the total expense ratio (TER) for Gilt and Treasury ETFs to 0.07 per cent, and taking US and UK investment grade Corporate bond ETFs down from 0.15 to 0.09 per cent. State Street's new ETFs have TERs of 0.15 per cent or 0.20 per cent.