(Bloomberg) — Loomis, Sayles & Co. is making a rare foray into the ETF world as the $358 billion money manager teams up with State Street Corp. to launch an active fixed-income product.
The two heavyweights have joined forces to birth the SPDR Loomis Sayles Opportunistic Bond exchange-traded fund (ticker OBND), according to a press release.
Loomis will manage the ETF, which started trading Tuesday. The “multi-asset credit strategy” will use active investing styles to navigate the global hunt for yield. The ETF can allocate to everything from high-grade and high yield corporate bonds to leveraged loans and securitized debt.
Even with another selloff on Tuesday, benchmark 10-year Treasury yields are barely above 1.5% — well below the past decade’s average of 2%.
The new strategy will be managed by a team including Kevin Kearns, Andrea DiCenso and Thomas Stolberg. The fund expense ratio is 0.55%.
OBND is one of a many active funds launching into the $6.8 trillion US industry this year, as well as the latest addition to the booming market for fixed-income ETFs.
For Loomis, home of bond investor Dan Fuss, it’s one of the few times the firm has dabbled with ETFs. It serves as adviser for the Natixis Loomis Sayles Short Duration Income ETF (LSST), which has accumulated just $40 million in assets, and for the IA Clarington Loomis Global Multisector Bond Fund (ILGB) in Canada.
“The low interest-rate environment is driving demand for non-traditional fixed income investments,” said Sue Thompson, head of SPDR Americas Distribution at State Street Global Advisors. “OBND seeks to meet investors’ needs for both yield and diversification while providing the benefits of active risk management.”
©2021 Bloomberg LP