State Street Global Advisors Introduces High Yield Municipal Bond SPDR Exchange Traded Fund
State Street Global Advisors (SSgA)*, the asset management business of State Street Corporation (NYSE:STT), today announced that the SPDR Nuveen S&P High Yield Municipal Bond Exchange Traded Fund (ETF) (NYSE:HYMB) began trading on the NYSE Arca on April 14, 2011. Its annual expense ratio is 0.45 percent.
Developed by State Street Global Advisors and Nuveen Asset Management, a recognized leader in the municipal bond market, the SPDR Nuveen S&P High Yield Municipal Bond ETF is designed to provide investors with cost effective access to high yield municipal bonds, an asset class offering attractive after tax yields.
“In combining the advantages of federal tax free income with competitive, risk-adjusted returns, the potential benefits of high yield municipal bonds are attracting a growing number of sophisticated financial advisors and investors,” said James Ross, senior managing director and global head of SPDR Exchange Traded Funds at State Street Global Advisors. “The addition of the SPDR Nuveen S&P High Yield Municipal Bond ETF strengthens our family of municipal bond ETFs, which now features seven SPDR Nuveen ETFs with more than $2.2** billion in assets.”
The SPDR Nuveen S&P High Yield Municipal Bond ETF seeks to track the performance of the S&P Municipal Yield Index. The Index is a market value-weighted index with 70 percent of its market value allocated to high yield bonds that are non-rated or rated below investment grade, 20 percent to Baa or BBB rated bonds, and 10 percent to A rated bonds. The Index, which excludes Commercial paper, Derivative securities, Notes, Taxable municipals, and Variable rate debt, is reviewed and rebalanced monthly.
“The launch of the SPDR Nuveen S&P High Yield Municipal Bond ETF underscores our commitment to working with State Street to manage innovative new products that blend the benefits of municipal bonds and exchange traded funds,” said Bill Huffman, Nuveen Asset Management President.
In 2010, State Street Global Advisors entered into an agreement with Nuveen Investments, a leading global provider of investment services to institutions and high-net-worth investors, under which Nuveen Asset Management became sub-adviser of SSgA’s municipal bond ETFs.
State Street manages $260*** billion in SPDR ETF assets worldwide (as of March 31, 2011) and is one of the largest ETF providers in the US and 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 Nuveen Investments
Nuveen Investments provides high quality investment services designed to help secure the long-term goals of institutions, high-net-worth and affluent investors as well as the consultants and financial advisors who serve them. Nuveen Investments markets a wide range of specialized investment solutions which provide investors access to capabilities of its high-quality boutique investment affiliates—NWQ, Nuveen Asset Management, Santa Barbara, Symphony, Tradewinds, and Winslow Capital. In total, Nuveen Investments managed $197 billion as of December 31, 2010. For more information, please visit the Nuveen Investments website at www.nuveen.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, 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.
**As of April 8, 2011.
***This AUM includes the assets of the SPDR Gold Trust (approx. $56 billion as of March 31, 2011), 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; and inflation risk. The municipal market can be affected by adverse tax, legislative or political changes and the financial condition of the issuers of municipal securities. High-yield municipal bonds are subject to greater credit risk and are likely to be more sensitive to adverse economic changes or subject to greater risk of loss of income and principal than higher-rated securities.
The municipal market may be volatile and can be significantly affected by adverse tax, legislative or political changes and the financial condition of the issuers of municipal securities. Interest rate increases can cause the price of a debt security to decrease. While income from municipal bonds is generally not subject to federal income tax, a portion of the dividends paid by an ETF may be subject to federal, state, or local income tax or the federal alternative minimum tax.
These investments may have difficulty in liquidating an investment position without taking a significant discount from current market value, which can be a significant problem with certain lightly traded securities.
“SPDR” is a registered trademark of Standard & Poor’s Financial Services, LLC (“S&P”) and has been licensed for use by State Street Corporation. No financial product offered by State Street or its affiliates is sponsored, endorsed, sold or promoted by S&P.
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.
Before investing, consider the funds’ 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.