The SSgA US Issuer Scored Corporate Bond Index strategy and the SSgA Euro Issuer Scored Corporate Bond Index strategy both seek to track an innovative benchmark design.
They track indices using financial factors to weight the allocation to corporate bond issuers based on profitability, operational efficiency, leverage and liquidity.
This is achieved by focusing on return on assets, interest coverage and current ratio.
The indices exclude debt issued by private companies and subordinated debt and seek to maintain similar sectoral characteristics to traditional benchmarks, but with lower volatility and improved risk-adjusted returns.
The Barclays Capital US Issuer Scored Corporate Index and Barclays Capital Euro Issuer Corporate Index are to be used as benchmarks for the strategies.
SSgA was involved in the development of the indices and the company has two-year exclusivity to managed passive strategies against these indices.
Kevin Anderson, global chief investment officer for fixed income and currency at SSgA, said: "The issuer scored corporate index expands the fixed-income market exposure toolkit to investors by providing a solution that addresses concerns about the risk posed to a portfolio by the underperformance or default of a single issuer or a small group of issuers.
"It does this by re-allocating capital to companies based on trends in financial strength in contrast to a traditional market cap weighted approach."
