State Street Global Advisors launched the SPDR Barclays Capital Long Term Credit Bond ETF (LWC) Wednesday on the NYSE Arca. It has an annual expense ratio of 0.15%.
The fund will track the Barclays Capital U.S. Long Credit Index. The index is comprised of dollar-denominated investment grade corporate and non-corporate credit bonds that have a remaining maturity of greater than or equal to 10 years. As of Dec. 31, 2008, the index held 965 issues with an average dollar-weighted maturity of 24.39 years.
“Demand for access to high quality, long term credit bonds is on the rise as investors search for alternatives to U.S. Treasuries that will improve the yield on their fixed income portfolios,” says Anthony Rochte, senior managing director at State Street Global Advisors in a written statement. “The SPDR Barclays Capital Long Term Credit Bond ETF is the longest-maturity credit bond ETF available to investors and a key addition to our growing family of fixed income SPDRs, which have attracted more than $800 million in net inflows in just the first two months of 2009.”
Currently, there are six long-term bond ETFs on the market. While those focus on Treasuries, the LWC follows corporate bonds, with the possibility of government bonds.