State Street Global Advisors (SSgA)*, the asset management business of
State Street Corporation (NYSE: STT), today announced that the SPDR BofA
Merrill Lynch Crossover Corporate Bond ETF (Symbol: XOVR) and the SPDR
BofA Merrill Lynch Emerging Markets Corporate Bond ETF (Symbol: EMCD)
began trading on the NYSE Arca on June 19, 2012. The new SPDR ETFs
provide investors with an opportunity to access the attractive yield and
total return potential of crossover bonds and emerging market corporate
debt.
The SPDR BofA Merrill Lynch Crossover Corporate Bond ETF seeks to track
the performance of the BofA Merrill Lynch US Diversified Crossover
Corporate Index. The Index is designed to measure the performance of US
dollar-denominated BBB and BB corporate debt publicly issued in the US
domestic market. “Crossover” corporate debt generally means corporate
debt rated at levels where the lower end of investment-grade debt and
the higher end of high-yield debt meet. Qualifying securities must be
rated BBB1 through BB3 inclusive (based on an average rating of Moody’s
Investors Service Inc., Standard & Poor’s Inc and Fitch, Inc.) have a
fixed income coupon schedule, have at least one year remaining to final
maturity, and a minimum amount of outstanding of $250 million or more of
issuance.
Index constituents are segmented into two groups: those rated between
BBB1 and BBB3, inclusive, and those rated between BB1 and BB3,
inclusive. Within these two groups, issues are capitalization-weighted
and each group is assigned a 50 percent weight in the overall index -
with a 2 percent cap on each issuer. As of 5/31/2012 approximately 3029
securities were included in the index. The SPDR BofA Merrill Lynch
Crossover Corporate Bond ETF’s expense ratio is 0.30 percent**.
“Featuring potentially higher yields than most investment grade bonds
and potentially less credit risk than most high yield issues, demand for
crossover bonds is growing among financial advisors and investors during
this extended low-yield environment,” said James Ross, senior managing
director and global head of SPDR Exchange Traded Funds at State Street
Global Advisors. “With the launch of the SPDR BofA Merrill Lynch
Crossover Corporate Bond ETF, precise, cost-efficient access to this
asset class is within reach for investors seeking exposure that spans
both investment grade and high-yield bonds.”
The SPDR BofA Merrill Lynch Emerging Markets Corporate Bond ETF seeks to
track the performance of the BofA Merrill Lynch Emerging Markets Large
Cap Senior Corporate Index. The Index is designed to measure the
performance of U.S. dollar-denominated emerging market corporate senior
and secured debt publicly issued in the U.S. domestic market and the
Eurobond market. To qualify for inclusion, an issuer must have primary
risk exposure to a country other than a member of the G10 (Belgium,
Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, the
United Kingdom, and the United States), a Western European country, or a
territory of the US.
Individual securities of qualifying issuers must be denominated in US
dollars, be senior or secured debt, have at least one year remaining to
final maturity, a fixed coupon and $500 million or more in outstanding
face value. As of 5/31/2012 approximately 454 securities were included
in the index. The SPDR BofA Merrill Lynch Emerging Markets Corporate
Bond ETF’s expense ratio is 0.50%.
“The SPDR BofA Merrill Lynch Emerging Markets Corporate Bond ETF
provides investors with an opportunity to tap into the growth potential
of emerging markets while minimizing exposure to emerging market
currencies,” said Ross. “As fixed-income portfolio diversification
becomes a higher priority for investors, interest in emerging market
bond exposure is increasing.”
State Street manages more than $307*** billion in SPDR ETF assets
worldwide (as of March 31, 2012) and is one of the largest ETF providers
globally.
About SPDR Exchange Traded Funds
SPDR ETFs are a comprehensive family spanning an array of international
and domestic asset classes. SPDR ETFs are managed by SSgA Funds
Management, Inc., a registered investment adviser and wholly owned
subsidiary of State Street Bank and Trust Company. The funds provide
professional investors with the flexibility to select investments that
are precisely aligned to their investment strategy. Recognized as the
industry pioneer, State Street created the first ETF in 1993 (SPDR S&P
500® – Ticker SPY). Since then, we’ve sustained our place as an industry
innovator through the introduction of many ground-breaking products,
including first-to-market launches with gold, international real estate,
international fixed income and sector ETFs. For more information, visit www.spdrs.com.
About State Street Global Advisors
State Street Global Advisors (SSgA) is a global leader in asset
management. The firm is relied on by sophisticated investors worldwide
for its disciplined investment process, powerful global investment
platform and access to every major asset class, capitalization range and
style. SSgA is the asset management business of State Street
Corporation, one of the world’s leading providers of financial services
to institutional investors.
*SPDR ETFs are managed by SSgA Funds Management, Inc., a registered
investment adviser and wholly owned subsidiary of State Street Bank&
Trust Company.
** The Adviser has contractually agreed to waive its advisory fee and
reimburse certain expenses, until October 31, 2015, so that the Net
Annual Fund Operating Expenses of the Fund will be limited to 0.30% of
the Fund’s average daily net assets before application of any fees and
expenses not paid by the Adviser under the Investment Advisory
Agreement. Such fees and expenses paid by the Adviser are limited to
certain direct operating expenses of the Fund and, therefore, do not
include the Fund’s “Acquired Fund Fees and Expenses,” if any. The
contractual fee waiver does not provide for the recoupment by the
Adviser of any fees the Adviser previously waived. The Adviser may
continue the waiver after the three year period, but there is no
guarantee that the Adviser will do so and after October 31, 2015, it may
be cancelled or modified at any time.
***This AUM includes the assets of the SPDR Gold Trust (approx. $69
billion as of March 31, 2012), for which State Street Global Markets,
LLC, an affiliate of State Street Global Advisors serves as the
marketing agent.
IMPORTANT RISK INFORMATION
ETFs trade like stocks, are subject to investment risk, fluctuate in
market value and may trade at prices above or below the ETFs net asset
value. Brokerage commissions and ETF expenses will reduce returns.
Bond funds contain interest rate risk (as interest rates rise bond
prices usually fall); the risk of issuer default; issuer credit risk;
liquidity risk; and inflation risk.
Foreign investments involve greater risks than US investments, including
political and economic risks and the risk of currency fluctuations, all
of which may be magnified in emerging markets.
Investing in high yield fixed income securities, otherwise known as junk
bonds is considered speculative and involves greater risk of loss of
principal and interest than investing in investment grade fixed income
securities. These Lower-quality debt securities involve greater risk of
default or price changes due to potential changes in the credit quality
of the issuer.
Distributor: State Street Global Markets, LLC, member FINRA, SIPC, a
wholly owned subsidiary of State Street Corporation. References to State
Street may include State Street Corporation and its affiliates. Certain
State Street affiliates provide services and receive fees from the SPDR
ETFs. ALPS Distributors, Inc., a registered broker-dealer, is
distributor for SPDR shares, MidCap SPDRs and Dow Jones Industrial
Average, all unit investment trusts and Select Sector SPDRs.
Before investing, consider the fund’s investment objectives, risks,
charges and expenses. To obtain a prospectus or summary prospectus which
contains this and other information, call 1-866-787-2257 or visit
www.spdrs.com. Read it carefully.
CORP-0523
