Global X has launched three new fixed income ETFs providing exposure to specific segments of the US Treasury yield curve through a “Laddered” maturity approach.

Bond laddering helps to diversify interest rate risk across the targeted maturity segment.

The Global X Short-Term Treasury Ladder ETF (SLDR US), Global X Intermediate-Term Treasury Ladder ETF (MLDR US), and Global X Long-Term Treasury Ladder ETF (LLDR US) have been listed on NYSE Arca, each with an expense ratio of 0.12%.

The funds track indices developed by FTSE Russell, composed of U.S. Treasury securities with specified maturity ranges—1-3 years for the short-term index, 3-10 years for the intermediate index, and 10-30 years for the long-term index.

The laddering strategy within each index involves constructing portfolios with bonds maturing at staggered intervals, often referred to as “rungs,” within these maturity ranges, with each rung covering one-year periods. The indices allocate their holdings equally across these rungs.

During the annual rebalance, securities in the rung with the shortest time to maturity are removed from the index, and new securities are added to the rung with the longest maturity, thereby preserving the ladder structure.

The main advantage of a bond laddering strategy where each maturity rung is equally weighted is that it spreads interest rate risk evenly across the targeted maturity segment. By diversifying the bond maturities, the approach reduces the impact of interest rate fluctuations on the overall portfolio, providing a balance between income generation and capital preservation.

Robert Scrudato, Director of Options and Income Research at Global X, commented: “With the launch of these Treasury ladder funds, Global X now proudly offers investors exposure across the yield curve. The Federal Reserve appears set to cut rates, and in such an environment these ETFs may appeal to investors who are seeking periodic cash flows.”