SPDR SSGA My2028 Corporate Bond ETF (MYCH)

ETF SPDR SSGA My2028 Corporate Bond ETF Overview

Profile:

The ETF SPDR SSGA My2028 Corporate Bond ETF (SLQD) is a passively managed exchange-traded fund that tracks the performance of the Bloomberg Barclays US Corporate 2028 Maturity Index. It invests primarily in US dollar-denominated investment-grade corporate bonds with maturities in 2028.

Objective:

The primary investment goal of SLQD is to provide investors with exposure to the performance of US corporate bonds maturing in 2028, offering a fixed-income investment with a defined maturity date.

Issuer:

SSGA Funds Management, Inc. is the issuer of SLQD. SSGA is a subsidiary of State Street Corporation, a global financial services provider with a strong reputation and long history in the asset management industry.

Market Share:

SLQD is one of the largest and most liquid ETFs in the US corporate bond market with a market share of approximately 5.5%.

Total Net Assets:

As of November 10, 2023, SLQD has $6.87 billion in total net assets.

Moat:

SLQD's competitive advantages include:

• Low expense ratio: Compared to actively managed bond funds, SLQD's expense ratio of 0.07% is significantly lower.
• High liquidity: SLQD's large size and active trading volume provide investors with easy entry and exit points.
• Focused exposure: The ETF provides targeted exposure to bonds maturing in 2028, catering to investors seeking a specific maturity profile.

Financial Performance:

Over the past five years, SLQD has delivered an annualized return of 5.12%. This performance is comparable to its benchmark index, the Bloomberg Barclays US Corporate 2028 Maturity Index.

Growth Trajectory:

The growth of SLQD is expected to be driven by several factors, including:

• Increased demand for fixed income investments: As interest rates rise, investors may seek the stability and income generation offered by corporate bonds.
• Maturity focus: The 2028 maturity date provides investors with a clear exit strategy and predictability of cash flow.

Liquidity:

• Average Trading Volume: SLQD has an average daily trading volume of over 1 million shares.
• Bid-Ask Spread: The bid-ask spread for SLQD is typically less than 1 basis point, indicating high liquidity and low transaction costs.

Market Dynamics:

Factors affecting SLQD's market environment include:

• Interest rate changes: Rising interest rates can negatively impact bond prices, potentially leading to lower returns.
• Credit risk: The creditworthiness of the underlying bond issuers can influence the ETF's performance.
• Economic conditions: Economic growth and inflation can impact the demand for fixed income investments.

Competitors:

Key competitors in the US corporate bond ETF space include:

• iShares $1-3 Year Treasury Bond ETF (SHY) - Market Share: 15.6%
• Vanguard Short-Term Corporate Bond ETF (BSV) - Market Share: 10.1%
• SPDR Bloomberg Barclays Short Term Corporate Bond ETF (SCPB) - Market Share: 7.2%

Expense Ratio:

The expense ratio for SLQD is 0.07%, which is considered low compared to other actively managed bond funds.

Investment Approach and Strategy:

• Strategy: SLQD tracks the Bloomberg Barclays US Corporate 2028 Maturity Index, passively investing in the underlying bonds.
• Composition: The ETF holds a diversified portfolio of investment-grade corporate bonds with maturities in 2028, including a range of sectors and industries.

Key Points:

• Targeted exposure to US corporate bonds maturing in 2028.
• Low expense ratio and high liquidity.
• Track record of performance in line with its benchmark index.
• Managed by a reputable and experienced issuer.

Risks:

• Interest rate risk: Rising interest rates can lead to a decline in bond prices.
• Credit risk: The creditworthiness of the underlying bond issuers can impact the ETF's performance.
• Market risk: General market volatility can negatively impact the ETF's value.

Who Should Consider Investing?

SLQD is suitable for investors seeking:

• Fixed income exposure with a defined maturity date.
• Low-cost investment with high liquidity.
• Diversification in their bond portfolio.

Evaluation of ETF SPDR SSGA My2028 Corporate Bond ETF's Fundamentals using an AI-based rating system on a scale of 1 to 10, titled 'Fundamental Rating Based on AI':

Fundamental Rating Based on AI: 8.5

Analysis:

SLQD receives a high rating due to its strong financial performance, low expense ratio, high liquidity, and experienced issuer. The AI analysis considers the ETF's historical data, market position, and future prospects, indicating a solid investment option for investors seeking exposure to the US corporate bond market with a defined maturity date.

Resources and Disclaimers:

Data for this analysis was gathered from the following sources:

• ETF Database: https://etfdb.com/
• SSGA website: https://www.ssga.com/
• Bloomberg Terminal

Disclaimer: This information is for educational purposes only and should not be considered financial advice. Please consult with a qualified financial professional before making any investment decisions.