The SPDR Barclays Capital International Corporate Bond ETF began trading on the New York Stock Exchange Arca today. It's annual expenses are 0.55%.
SSgA wanted to be ahead of the pack because history has shown that being first with an ETF product makes a big difference in terms of being able to gather assets, said Tom Anderson, the firm's vice president and head of strategy and research.
“This builds on our leadership position in the international-bond space,” he said.
But being first to market isn't the be-all and end-all, said Matthew Tucker, head of fixed-income investment strategy at BlackRock's iShares unit.
“We do see from financial advisers that being first to market is important, but there is also a benefit to having a large breadth of offerings that can be building blocks for a portfolio,” he said.
For example, the iShares JPMorgan USD Emerging Markets Bond Fund was the second fund of its kind to market and is now the largest, with $1.4 billion, Mr. Tucker said.
BlackRock is interested in the corporate-international-bond area for an ETF, he said, declining to elaborate.
The SSgA fund seeks to track the Barclays Capital Global Aggregate ex >$1 billion Aggregate Bond Index. The index includes euro-dollar and euro-yen corporate bonds, as well as Canadian government, agency and corporate securities that have a minimum $1 billion market capitalization and at least one year remaining to maturity.
The fund has 90% currency exposure to the euro, which has been plummeting in value over the past few days, due to the crisis in Greece.
“We aren't ever trying to time a product,” Mr. Anderson said. “We are putting out useful ETFs that help people express an investment view.”
Jessica Toonkel Marquez is a reporter at InvestmentNews, a sister publication of Pensions & Investments.