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
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 .
Read more at How Long the Oligarchy .