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Barclays to Launch U.S. Fixed Income ETFs

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Barclays Global Investors (BGI) filed with the Securities and Exchange Commission (SEC) January 2 to launch five fixed income exchange-traded funds (ETFs) based on Lehman indexes:

  • 1-3 year Treasury
  • 7-10 year Treasury
  • 20 year Treasury
  • All Treasury
  • Government/Credit (formerly Government/Corporate)

The BGI filing comes on the heels of the recent Nuveen announcement of the anticipated launch of five Fixed Income Trust Receipts (FITRs), ETFs that will track U.S. Ryan Treasury Indexes. These two announcements by large fund managers signal that ETFs have a future in fixed income markets, and many industry observers believe the first U.S.-based active ETFs are just around the corner.

BGI Canada launched the world's first fixed income ETFs in late November with the iG5 (symbol: XGV) and the iG10 (symbol: XGX), which trade on the Toronto Stock Exchange.

Historical performance of the iUnits Government of Canada 5-Year Bond
Fund (iG5)


Source
: Toronto Stock Exchange

Historical performance of the iUnits Government of Canada 10-Year Bond
Fund
(iG10)


Source
: Toronto Stock Exchange


BGI has also filed for some Goldman sector ETFs, as well as for a Nasdaq Biotech ETF and Cohen and Steers Realty Majors ETFs. Information about all of these filings is available at freeedgar.com. All of these funds will trade on the American Stock Exchange upon final regulatory approval. According to BGI, the Nasdaq Biotech fund and the Cohen and Steers funds will most likely be available sometime in the first quarter of 2001.

State Street Global Advisors (SSgA), the broker that manages SPDR 500 and streetTRACKS ETFs, said that it has no intention of launching fixed income ETFs in the near future, but that it is looking into investor demand for ETFs in that asset class.