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State Street Adds Short Term Junk Bond ETF
State Street has made another addition to its fixed income ETF lineup, recently rolling out the SPDR Barclays Capital Short Term HighYield Bond ETF (SJNK). The new fund will target junk bonds that have less than five years remaining to maturity, thereby delivering a unique combination of low interest rate risk with significant credit risk. The new ETF is linked to a Barclays index comprised of about 350 bonds rated below investment grade. According to the SJNK fact sheet, the underlying index has an average maturity of about 3.3 years and a weighted average coupon of about 8.4%. The yield to worst on the index is just under 7% [see Fixed Income ETF Center]. Bonds deliver yields to compensate investors for two sources of risk: interest rate risk and credit risk. The former is generally determined by the time until maturity; longer-term bonds are more sensitive to changes in interest [...] Click here to read the original article on ETFdb.com. Related Posts: Bond ETFs For Every Objective 2011: A Year Of ETF Firsts PIMCO Debuts High Yield Bond ETF (HYS) January ETF Roundup: Launches, Filings, and Closures Guggenheim Funds Launches Suite Of High Yield BulletShares
State Street has made another addition to its fixed income ETF lineup, recently rolling out the SPDR Barclays Capital Short Term HighYield Bond ETF (SJNK). The new fund will target junk bonds that have less than five years remaining to maturity, thereby delivering a unique combination of low interest rate risk with significant credit risk. The new ETF is linked to a Barclays index comprised of about 350 bonds rated below investment grade. According to the SJNK fact sheet, the underlying index has an average maturity of about 3.3 years and a weighted average coupon of about 8.4%. The yield to worst on the index is just under 7% [see Fixed Income ETF Center].  Bonds deliver yields to compensate investors for two sources of risk: interest rate risk and credit risk. The former is generally determined by the time until maturity; longer-term bonds are more sensitive to changes in interest [...]

Click here to read the original article on ETFdb.com.

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