More New Bond ETFs: BWZ and MBG

This week State Street Global Advisors announced the availability of two new bond ETFs under its SPDR brand.

SPDR Barclays Capital Short Term International Treasury Bond ETF (BWZ) is designed to track the price and yield performance of the Barclays Capital 1-3 Year Global Treasury ex-US Capped Index.  The fund owns securities from 21 investment-grade countries outside of the United States.

Thanks to the relatively short maturity on these securities, BWZ is likely to be more sensitive to currency fluctuations than interest rate changes.  If this sounds familiar, it is because iShares launched a similar fund last Friday, iShares S&P/Citigroup 1-3 Year International Treasury Bond Fund (ISHG).

SPDR Barclays Capital Mortgage Backed Bond ETF (MBG) attempts to track the price and yield of the Barclays Capital U.S. MBS Index (the “MBS Index”).  The MBS Index measures the performance of the U.S. agency mortgage pass-through segment of the U.S. investment grade bond market.

If it occurs to you that “SPDR” and “Barclays”  don’t look quite right in the same fund name, you’re right.  Recent market turmoil is creating some strange combinations and alliances.  See my recent article Know Your ETF Players for an explanation.

Disclosure:  no positions in the mentioned funds