State Street Adds Junk Bond Rungs to Laddered ETF Series

Core Insights - State Street is expanding its MyIncome bond ladder fund suite by adding high-yield bond ETFs, which will be actively managed [1][2] - The new ETFs will complement the existing MyIncome series, which includes corporate and municipal bond ETFs with maturities from 2026 to 2035 [2][3] - The high-yield bond market is currently facing challenges, with spreads indicating that high-yield bonds may not be an ideal investment at this time [4] Product Development - State Street is preparing to launch five target-maturity high-yield ETFs, a product category currently dominated by iShares and Invesco [2] - The MyIncome series, launched last year, has a total asset representation of approximately $217 million [4] - Invesco and iShares also have high-yield ETF series with maturities ranging from 2025 to 2033 and 2025 to 2032, respectively, with assets of $3.5 billion and $2.5 billion [5] Market Context - The interest in high-yield bonds is increasing among asset managers, as evidenced by Vanguard's recent launch of its first actively managed high-yield ETF [4] - Despite the appeal of high-yield ETFs, current market conditions suggest that the risk-reward balance may not be favorable, as BBB bonds are priced similarly to AAAs [4] - Target-maturity ETFs provide a way for advisors to create bond ladders without the complexities of managing individual securities, offering flexibility in cash flow management [4]