SSGA partners with Blackstone on high yield ETF

Feb 23rd, 2022 | By | Category: Fixed Income

State Street Global Advisors has launched a new fixed income ETF that aims to provide a high level of income by investing in various high yield securities.

Sue Thompson, Head of SPDR Americas Distribution at State Street Global Advisors

Sue Thompson, Head of SPDR Americas Distribution at State Street Global Advisors.

The SPDR Blackstone High Income ETF (HYBL US) has been listed on Cboe BZX Exchange with an expense ratio of 0.70%.

The fund has come to market with approximately $120 million in assets.

HYBL is actively managed and sub-advised by Blackstone Credit, the credit investment arm of alternative investment giant Blackstone.

Blackstone Credit employs a top-down asset allocation approach coupled with bottom-up security selection to a universe of US dollar-denominated, sub-investment grade corporate bonds, senior loans, and collateralized debt obligations (CLOs).

The top-down approach evaluates macroeconomic, technical, fundamental, and relative value factors to determine the allocation among the various asset segments.

The bottom-up security selection process, meanwhile, utilizes a systematic process in high yield bonds to capture credit risk premium by identifying and exploiting potential mispricings at the individual security level.

The ETF seeks to outperform a composite benchmark comprising 50% high yield bonds and 50% senior loans with less volatility than the individual benchmark components over a full market cycle.

The fund is the second fixed income ETF developed through a partnership between SSGA and Blackstone. The SPDR Blackstone Senior Loan ETF (SRLN US), which launched in April 2013, was the first actively managed ETF to provide targeted exposure to senior loans. The fund currently houses around $10 billion in assets and also comes with an expense ratio of 0.70%.

Sue Thompson, Head of SPDR Americas Distribution at State Street Global Advisors, said: “We’re excited to expand on our successful partnership with Blackstone to provide investors with a new approach to income investing. As investors search for higher yields, demand for senior loans and high yield corporate bonds is on the rise. HYBL is designed to meet this demand while providing access to Blackstone’s deep expertise across these segments of the credit market.”

Dan McMullen, Head of North American Liquid Portfolio Management for Blackstone, added: “We see a compelling opportunity to generate income in high yield corporate bonds, senior loans, and CLO debt securities through our active management approach. HYBL will build on the proven track record we have established through SRLN with State Street and benefit from our deep expertise in credit investing.”

Tags: , , , , , , , ,

Leave a Comment