Nuveen Investments of Chicago plans to introduce the first exchange-traded funds to track U.S. Treasury indexes, according to the company. The five new funds, called Fixed Income Trust Receipts, will be based on indexes of one, two, five and 10-year treasury issues and 20-year STRIPs - separately-traded registered interest and principal securities, Nuveen said.
The fixed income trust receipts are the first treasury exchange-traded funds created in the U.S. and will trade on the American Stock Exchange once regulatory approval is obtained, according to Nuveen. Nuveen registered the funds with the Securities and Exchange Commission on Dec. 28, said Laurel O'Brien, a spokesperson for Nuveen.
The funds will track the Ryan Treasury Indexes, which reflect the risk and return characteristics of on-the-run treasuries, the most recently auctioned treasury security for a designated maturity, according to Nuveen. Because the new funds trade like equities in the equity markets, they integrate well with investors' efforts to use a variety of exchange-traded funds in asset allocation strategies, according to Gary Gastineau, managing director of exchange-traded fund product development at Nuveen.
"In terms of structure, the funds are very similar to equity funds that have been so successful, such as Nasdaq 100 and SPDR funds," he said.
Nuveen began offering its first equity exchange-traded fund, based on the America's Fastest Growing Companies Index, in October 2000. Nuveen hopes to receive regulatory approval to offer the new funds before the end of this year, Gastineau said.