Launch Pad: ETF

The SPDR ETFs – also listed on Germany’s Deutsche Börse – aim to help investors deal with duration risk.

Antoine Lesne, fixed income portfolio strategist for SSGA, said: “With government bond yields at all-time lows, many fixed-income investors are reviewing the sources of return in their bond allocations. More specific allocations to short-dated bond exposures via these three new ETFs may offer the potential to deliver better risk-adjusted returns than their all-maturity counterparts and help lower the negative impact of a steepening yield curve.”

Key features:

Article continues after advert

- The products are: Barclays 0-3 Year US Corporate Bond Ucits ETF; Barclays 0-3 Year Euro Corporate Bond Ucits ETF; and SPDR Barclays 1-3 Year US Treasury Bond Ucits ETF.

- These three new ETFs are physically backed.

- They offer exposure to a range of Global, US, European, UK, Emerging Market, High Yield and Inflation-Linked indices.

- There are now 51 SPDR ETFs available across Europe.

IFA VERDICT: Simon Webster, Facts & Figures Financial Planners, Kent

“Yields on longer-dated bonds are starting to rise in anticipation of the end of QE and its ultimate reversal. Shorter-term bonds should hold their value better in coming months - but their yield is not as attractive. However, the very real risk of a ‘bond bubble burst’ makes shorter term options look safer to us right now.”