State Street Global Advisors has launched a fixed income ETF in Europe investing in short-term securities issued by the US government.
The SPDR Bloomberg Barclays 1-3 Month T-Bill UCITS ETF is a fund that mirrors the strategy of a $9.2bn ETF offered by SSGA in the US and targets the Treasury bill (T-Bill) market by tracking the Bloomberg Barclays US Treasury Bills 1-3 Month Index.
The new ETF is the only physical ETF that tracks the the Bloomberg Barclays US Treasury Bills 1-3 Month Index.
Treasury bills (T-Bills) are debt obligations of the US government that are issued with no more than one year until expiry. They do not pay any coupons and are thus typically issued at a discount to their par value.
T-Bills are often considered an universe in which invest amid market uncertainty, and current yields are higher than longer-dated US Treasury Bonds due to the US yield curve inversion.
Antoine Lesné, head of investment strategy for SPDR ETF, said: "The ETF can be used a strategic portfolio building block, providing exposure to short-dated US T-Bills.
"Alternatively, it can be used to make tactical characteristic adjustments to an investor's overall portfolio which could include reducing the overall duration of a bond portfolio or increasing its credit quality. In addition, the fund can help with cash and liquidity management."