State Street Debuts Active Target Maturity Bond ETFs

State Street Global Advisors introduced 14 new actively managed target maturity bond ETFs today. 

The SPDR SSGA MyIncome ETFs include both corporate and municipal bond options with maturity dates ranging from 2026 to 2034, according to a press release.

Anna Paglia, chief business officer for State Street Global Advisors, said the new fund aims to help investors “protect against the potential for precarious rate fluctuations ahead.”

The debut comes as investors seek ways to manage interest rate risk and cash flows in their portfolios, the release said. These new ETFs offer a potential solution for retirees and those nearing retirement who want to build custom bond ladder portfolios without the complexity of managing individual bonds.

State Street’s entry into this market adds a new competitor in a space currently dominated by just two major players, said Aniket Ullal, CFRA head of ETF data and analytics.

This move could offer more choice to investors in a category that has experienced notable growth. According to Ullal, the target maturity ETF category has attracted about $10 billion in inflows this year, reflecting rising demand for these types of products.

State Street Enters Growing ETF Segment

Ullal notes that active management offers potential benefits in the bond ETF space. “The fund manager has the discretion to select the securities they hold,” Ullal explained, which can lead to “more flexibility in selecting securities that are more liquid.”

This flexibility is evident in the new funds’ holdings. For instance, the SPDR SSGA My2026 Corporate Bond ETF (MYCF) contains 70 securities, according to its fund page. In contrast, the ICE 2026 Maturity US Corporate Index, which serves as the fund’s benchmark, includes 688 holdings.

The new ETFs enter a market with two dominant players, Invesco’s BulletShares and iShares’ iBond products. “It’s a very attractive space for State Street to get into,” he observed.

For financial advisors, these products offer a way to enhance their value proposition. “It allows advisors to add value because they can actually customize solutions for their clients,” Ullal said. He added that this customization can help justify advisor fees in an era dominated by low-cost index funds.

The targeted nature of these ETFs allows for more precise portfolio construction “because you’re getting very specific maturity date funds,” Ullal said. This precision can be valuable for investors planning for specific financial goals or liabilities.

As interest rates potentially decline, investors may need to reconsider their fixed income allocations, Ullal said. “Investors and advisors need to think more about what kind of duration risk do they want to take on? What kind of credit risks do they want to take on?” he observed, adding that these products can help “calibrate your exposure more” compared to simpler strategies used when rates were higher.

“With more rate cuts on the horizon, I think investors have to think more carefully about their fixed income allocation,” Ullal noted. He highlighted that when rates were very high, investors could stay in short duration, high-quality bonds and still get good yields. Now, with rates likely to be cut further, these new products could help investors and advisors fine-tune their approach to both duration and credit risk.

The new SPDR SSGA MyIncome ETFs have expense ratios ranging from 0.15% to 0.2%, with initial assets under management of $5 million each as of Monday. The suite includes nine corporate bond ETFs and five municipal bond ETFs, providing options for both taxable and tax-exempt income seekers.