State Street Global Advisors (SSgA), the investment management
business of State Street Corporation (NYSE: STT), today announced
that the SPDR® Nuveen Barclays Capital Build America Bond ETF
(Symbol: BABS) began trading on the NYSE Arca on May 13, 2010. The
municipal bond SPDR is the first new exchange traded fund developed
under a sub-advisory agreement between State Street Global Advisors
and Nuveen Investments subsidiary, Nuveen Asset Management. Its
annual expense ratio is 0.35 percent.
Designed to provide investors with exposure to Build America
Bonds, which can offer an attractive risk/reward potential when
compared with equivalently rated corporate debt, the SPDR Nuveen
Barclays Capital Build America Bond ETF seeks to track the
performance of the Barclays Capital Build America Bond Index. As of
April 30, 2010, the index provides exposure to 85 issues.
“Build America Bonds are a relatively new asset class; however,
as investors and advisors have grown more familiar with these
bonds, demand for diversified access to this segment of the
municipal bond market has increased substantially,” said Anthony
Rochte, senior managing director at State Street Global Advisors.
“The first municipal bond ETF developed under our agreement with
Nuveen, the SPDR Nuveen Barclays Capital Build America Bond ETF
underscores our commitment to offering cutting-edge products that
provide investors with precise exposure to hard-to-reach corners of
the market.”
Created under the American Recovery and Reinvestment Act of
2009, Build America Bonds were designed to appeal to a broader set
of investors than traditional tax-exempt municipal bonds and reduce
the borrowing costs of state and local governments. The interest
from Build America Bonds is subsidized by the US Treasury. Unlike
most municipal bonds, Build America Bonds are taxable; however,
yields presently are comparable to corporate bonds, which
historically have had a higher default rate than municipal bonds.
Between the launch of the program in April 2009 and March 31, 2010,
there have been 1,066 separate Build America Bond issues, which
have supported more than $90 billion of municipal financing.
“Build America Bonds continue to attract investors seeking to
diversify their fixed income portfolios,” said Bill Huffman, chief
operating officer and co-head of Nuveen Asset Management. “With the
launch of the SPDR Nuveen Barclays Capital Build America Bond ETF,
we look forward to working with State Street to help these
investors access this unique asset class which helps finance
essential service infrastructure projects across the United
States.”
On March 30, 2010, State Street Global Advisors announced that
it entered into an agreement with Nuveen Investments, a leading
global provider of investment services to institutions and
high-net-worth investors, under which Nuveen became sub-adviser of
SSgA’s municipal bond ETFs.
State Street Global Advisors is one of the largest ETF providers
globally with assets under management for SPDR ETFs totaling more
than $204 billion as of March 31, 2010.*
About Nuveen Investments
Nuveen Investments provides high quality investment services
designed to help secure the long-term goals of institutions and
high net worth investors as well as the consultants and financial
advisors who serve them. Nuveen Investments markets its growing
range of specialized investment solutions under the high quality
brands of HydePark, NWQ, Nuveen, Santa Barbara, Symphony,
Tradewinds and Winslow Capital. In total, the Company managed $150
billion of assets on March 31, 2010. For more information, please
visit the Nuveen Investments website at www.nuveen.com.
About State Street Global Advisors
State Street Global Advisors, the investment management business
of State Street Corporation (NYSE: STT), delivers investment
strategies and integrated solutions to clients worldwide across
every asset class, investment approach and style. With $1.9
trillion in assets under management at March 31, 2010, State Street
Global Advisors has investment centers in Boston, Hong Kong,
London, Montreal, Munich, Paris, Singapore, Sydney, Tokyo, Toronto
and Zurich, and offices in 27 cities worldwide. For more
information, visit State Street Global Advisors at
www.ssga.com.
* Source: State Street Global Advisors’ Intermediary Business
Group – Strategy & Research
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.
Frequent trading of ETF’s could significantly increase
commissions and other costs such that they may offset any savings
from low fees or costs.
Income exempt from federal income tax may be subject to state or
local taxes and the federal alternative minimum tax (AMT). Capital
gains may by subject to federal income and other taxes.
Bond funds contain interest rate risk (as interest rates rise
bond prices usually fall). There are additional risks for funds
that invest in mortgage-backed and asset-backed securities
including the risk of issuer default; credit risk and inflation
risk.
The municipal market is 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. A portion of the dividends you receive may be subject to
federal, state, or local income tax or may be subject to the
federal alternative minimum tax.
Because there is no guarantee that the relevant provisions of
the American Recovery and Reinvestment Act will be extended, the
ability of municipalities to issue Build America Bonds may expire
on December 31, 2010. The number of available Build America Bonds
may be limited as a result, which may negatively affect the value
of Build America Bonds. Also, there is no guarantee that
municipalities will continue to issue Build America Bonds in the
future and no assurance that the bonds will continue to be actively
traded.
Nuveen® is registered trademark of Nuveen Investments.
"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 Corporation or its affiliates is sponsored, endorsed, sold
or promoted by S&P or its Affiliates, and S&P and its
affiliates make no representation, warranty or condition regarding
the advisability of buying, selling or holding units/shares in such
products. Standard & Poor’s®, S&P®, SPDR®, S&P 500® and
Select Sector SPDRs® are registered trademark of Standard &
Poor’s Financial Services LLC and have been licensed for use by
State Street Corporation.
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.
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