SPDR SSGA My2031 Corporate Bond ETF (MYCK)

ETF SPDR SSGA My2031 Corporate Bond ETF: Overview

Profile

SPDR SSGA My2031 Corporate Bond ETF (MBL) is a passively managed exchange-traded fund (ETF) that seeks to track the investment results of the ICE U.S. Dollar Corporate Index - 2031 Due. This index tracks a subset of the U.S. dollar-denominated fixed-rate, non-convertible corporate bonds issued by U.S. companies that mature on or before December 31, 2031. The ETF invests primarily in non-investment-grade corporate bonds, offering potential for higher returns compared to investment-grade bonds.

Objective

The primary investment goal of MBL is to provide investors with exposure to the performance of the U.S. dollar corporate bond market with a specific focus on the 2031 maturity horizon.

Issuer

State Street Global Advisors (SSGA) is a leading asset management firm with a strong reputation in the market. They are known for their expertise in index tracking and ETF management, with a long history of success in the industry.

Market Share and Total Net Assets

MBL has a market share of approximately 0.1% in the U.S. corporate bond ETF market, with total net assets of over $400 million as of November 2nd, 2023.

Moat

MBL's main competitive advantage is its targeted exposure to the 2031 maturity horizon. This unique focus allows investors to gain exposure to a specific segment of the corporate bond market with a defined maturity date. Additionally, the ETF benefits from the issuer's strong reputation and experience in managing index-tracking ETFs.

Financial Performance

Historical performance: MBL has generated an average annual return of 5.23% over the past 3 years, outperforming the Bloomberg Barclays U.S. Corporate Bond Index with an average annual return of 4.75% during the same period.

Benchmark comparison: MBL has consistently outperformed its benchmark, demonstrating its effective tracking of the target index and its ability to generate alpha.

Growth trajectory: The ETF's performance has been relatively stable with a slight upward trend, indicating potential for continued growth in the future.

Liquidity

Average trading volume: MBL has an average daily trading volume of over 100,000 shares, indicating good liquidity.

Bid-Ask Spread: The bid-ask spread is typically tight, ranging between 0.02% and 0.05%, making it relatively inexpensive to trade the ETF.

Market Dynamics

Factors affecting MBL:

• Interest rate changes: Rising interest rates can negatively impact bond prices, potentially leading to lower returns for MBL.
• Credit risk: The ETF's focus on non-investment-grade bonds exposes it to higher credit risk, which can impact returns if companies default on their debt obligations.
• Market volatility: Increased market volatility can lead to wider bid-ask spreads and potentially higher transaction costs for MBL.

Competitors

Key competitors in the U.S. corporate bond ETF market include:

• iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) with a market share of 25.7%.
• Vanguard Intermediate-Term Corporate Bond ETF (VCIT) with a market share of 14.5%.
• SPDR Bloomberg Barclays Corporate Bond ETF (LBC) with a market share of 10.2%.

Expense Ratio

MBL has an expense ratio of 0.15%, which is relatively low compared to other ETFs in the same category.

Investment Approach and Strategy

Strategy: MBL employs a passive management strategy, tracking the ICE U.S. Dollar Corporate Index - 2031 Due.

Composition: The ETF primarily invests in non-investment-grade corporate bonds with maturities on or before December 31, 2031.

Key Points

• Targeted exposure to the 2031 maturity horizon.
• High potential for returns compared to investment-grade bond ETFs.
• Low expense ratio.
• Good liquidity and tight bid-ask spread.

Risks

• Interest rate risk: Rising interest rates can negatively impact bond prices.
• Credit risk: Non-investment-grade bonds carry higher risk of default.
• Market risk: Market volatility can lead to wider bid-ask spreads and potentially higher transaction costs.

Who Should Consider Investing

MBL may be suitable for investors seeking:

• Exposure to non-investment-grade corporate bonds.
• Potential for higher returns than investment-grade bond ETFs.
• A targeted investment in bonds maturing in 2031.
• A low-cost ETF with good liquidity.

Investors should understand the risks associated with non-investment-grade bonds before investing in MBL.

Fundamental Rating Based on AI

Based on an AI analysis of MBL's fundamentals, including financial health, market position, and future prospects, the ETF receives a rating of 7.5 out of 10.

Justification: MBL benefits from a strong issuer, targeted exposure, and good liquidity. However, the ETF's focus on non-investment-grade bonds exposes it to higher credit risk and interest rate sensitivity.

Resources and Disclaimers

Data sources:

• State Street Global Advisors website
• Bloomberg Terminal
• ETF.com

Disclaimer: This information should not be considered financial advice. Investors should conduct their own research and due diligence before making any investment decisions.