Barclays Close to Launching New Fixed-Income ETFs

May 29, 2002 ( - Barclays, the British financial services giant, inched closer to getting the green light to sell seven exchange-traded funds (ETF) tracking fixed-income indices.

The Securities and Exchange Commission (SEC) approved sending the Barclays application out for public comment. If the SEC gives final approval, the Barclays products will represent the first US ETFs to track fixed-income rather than equity indices.
Barclays proposal calls for four of the new ETFs to track indices representing different segments of the US treasury market, and three to track indices consisting of investment grade government and/or corporate fixed-income securities.

Barclays could begin selling them as early as July if there are no serious problems.


ETFs are baskets of securities that trade on an exchange just like individual stocks. Unlike regular open-end mutual funds, they can be bought and sold throughout the trading day.
Investors benefit by having the opportunity to trade baskets of bonds in a single transaction for about the same cost as trading equity securities, SEC officials said.
They can also take advantage of, or protect themselves from ups and downs in the market with, a fund product that displays its portfolio on a daily basis rather than semi-annually.

They have been exploding in popularity since the SEC first approved them in 1992. In 2001, the funds had net new investments of $31 billion compared to $32 billion for equity mutual funds.

Read more in Black Box: Exchange-Traded Funds .

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