State Street Global Advisors launches SPDR MarketAxess Investment Grade 400 Corporate Bond ETF
State Street Global Advisors has announced the launch of the SPDR MarketAxess Investment Grade 400 Corporate Bond ETF (LQIG).
Designed to blend the advantages of an ETF with the tradability benefits of investing in US Investment grade corporate bonds with higher liquidity compared to the broader US corporate bond market, LQIG offers investors credit exposure with the potential for tighter bid-ask spreads, lower premium/discounts, and more transparency into the underlying holdings’ real-time valuations.
“The growth of electronic bond trading volume coupled with the increasing adoption of fixed income ETFs is bringing the benefits of bond liquidity to all investors,” says Rory Tobin, Global Head of SPDR ETF Business at State Street Global Advisors. “Given State Street’s heritage as a liquidity leader in the ETF market, we’re excited to be working with MarketAxess, one of the world’s largest electronic fixed income trading venues, to launch LQIG. This innovative SPDR ETF is designed to provide bond investors with access to U.S. corporate bonds with higher relative liquidity and tradability.”
Fixed income markets are evolving with smarter electronic trading protocols, more sophisticated, automated investment strategies and greater availability of useful data. MarketAxess US Investment Grade 400 Corporate Bond Index is a more data-driven approach to indexation and is paving the way for improved index and portfolio construction.
The SPDR MarketAxess Investment Grade 400 Corporate Bond ETF seeks to track the MarketAxess US Investment Grade 400 Corporate Bond Index. The Index measures the performance of 400 U.S. dollar denominated investment grade corporate bonds with higher-than-average liquidity relative to the broader US corporate bond market. Powered by MarketAxess’ proprietary liquidity and pricing data – Relative Liquidity Score and Composite+ pricing engine – the Index combines actionable liquidity with broad market exposure. MarketAxess’ data capabilities support real-time pricing, liquidity assessment and valuation, allowing for greater transparency and tradability.
“Most fixed income indices are designed to reflect an investment with broad market exposure and not for tradable products where the underlying components are regularly available. By contrast, the MarketAxess US Investment Grade 400 Corporate Bond Index, launched last month, prioritises liquidity, transparency, and a high availability of the constituent bonds,” says Chris Concannon, President and Chief Operating Officer at MarketAxess. “We believe the launch of LQIG will be instrumental in supporting increased tradability in the traditionally fragmented and less liquid fixed income market.”
SPDR believes innovation in indexation will be a catalyst for further development in the fixed income market.