An actively managed emerging markets bond ETF is about to launch bringing further diversity to the bond ETF offerings currently available. Grail Advisors LLC is partnering with DoubleLine Capital LP to launch the ETF soon. The bond ETF will be managed by Los Angeles based DoubleLine’s emerging markets fixed income team and include an operating expense of 95 basis points. The ETF will be the first for DoubleLine which will invest in corporate debt. Grail is looking to launch more custom, actively managed ETF’s in the coming years. It launched its first ETF in 2009 and currently provides seven offerings. While actively managed ETF’s are increasing in popularity, it’s going to be tough for Grail to make a name for itself and provide ETF’s with liquidity. Two of its ETF’s which launched more than six months ago, the Intermediate Municipal Bond ETF (GMMB) and the Core Taxable Bond ETF (GMTB), trade less than a couple thousand shares a day. An ETF like that is basically worthless.
A new international bond ETF has arrived from the folks at State Street Global Advisors (STT). Last week, the SPDR(R) Barclays Capital International Corporate Bond ETF (IBND) began trading on the NYSE. The ETF seeks to track the performance of the Barclays Capital Global Aggregrate ex-USD Bond Index which includes Euro-Dollar, Euro-Yen corporate bonds as well as Canadian bonds.
"As the first US-listed ETF to provide access to international corporate bonds, the SPDR Barclays Capital International Corporate Bond ETF offers a level of fixed income diversification that has not been readily accessible to investors," said James Ross, senior managing director at State Street Global Advisors. "Demand for foreign debt issues, which account for more than 60 percent of the world’s bond supply, is increasing among investors looking to participate in growth outside of the US and strengthen the diversification of their fixed-income portfolios."