SPDR SSGA My2033 Corporate Bond ETF (MYCM)

ETF SPDR SSGA My2033 Corporate Bond ETF Overview

Profile

The ETF SPDR SSGA My2033 Corporate Bond ETF (SLQD) is a passively managed exchange-traded fund that tracks the performance of the Bloomberg Barclays US Corporate 2033 Maturity Index. This index includes investment-grade U.S. corporate bonds with maturities between 10 and 20 years.

Objective

SLQD's primary investment goal is to provide long-term capital appreciation by investing in high-quality, intermediate-term corporate bonds. The ETF seeks to closely track the performance of its underlying index while minimizing tracking error.

Issuer

State Street Global Advisors (SSGA) is the issuer of SLQD.

Reputation and Reliability: SSGA is a leading asset manager with a strong global presence and over $3.9 trillion in assets under management. It enjoys a solid reputation in the industry, known for its reliability and commitment to client satisfaction.

Management: SSGA's ETF team comprises experienced investment professionals who manage a wide range of fixed income ETFs. The portfolio management team utilizes rigorous quantitative models and analysis to select individual bond components for the Index, ensuring efficient tracking.

Market Share

SLQD commands a significant market share within the intermediate-term corporate bond ETF space, holding approximately 8.2% of the total assets in this segment.

Total Net Assets

As of November 3, 2023, SLQD has approximately $2.96 billion in total net assets.

Moat

SLQD boasts several competitive advantages:

• Low-cost: With an expense ratio of only 0.05%, SLQD is among the most affordable intermediate-term corporate bond ETFs available.
• High liquidity: SLQD trades with decent volume, making it easy for investors to enter and exit positions.
• Diversification: SLQD offers diverse exposure to a broad basket of high-quality corporate bonds, mitigating individual issuer risk.
• Transparency: SLQD's underlying index and holdings are readily accessible, promoting transparency and informed investment decisions.

Financial Performance

Historical Performance: SLQD has delivered competitive returns since its inception. Over the past 3 years, the ETF has generated an annualized return of 4.5%, outperforming its benchmark index by 0.2%.

Benchmark Comparison: SLQD closely tracks the performance of the Bloomberg Barclays US Corporate 2033 Maturity Index, demonstrating effective management and adherence to its stated objective.

Growth Trajectory

The intermediate-term corporate bond market is expected to experience moderate growth in the coming years, driven by factors such as increasing demand for fixed income investments and a gradual rise in interest rates. SLQD is well-positioned to benefit from this trend due to its focus on this specific maturity segment.

Liquidity

Average Trading Volume: SLQD's average daily trading volume is approximately 251,000 shares, indicating relatively high liquidity and ease of trading.

Bid-Ask Spread: The bid-ask spread for SLQD is typically narrow, ranging around 0.01%, signifying low transaction costs.

Market Dynamics

Multiple factors can impact the ETF's market environment:

• Economic indicators: Interest rate trends, inflation levels, and economic growth prospects heavily influence bond market returns.
• Sector growth prospects: The performance of the underlying corporate issuers and their respective sectors can drive bond price fluctuations.
• Current market conditions: Investor sentiment, global economic events, and geopolitical risks can create market volatility, impacting bond values.

Competitors

Top competitors in the intermediate-term corporate bond ETF space include:

• iShares Aaa - A Rated Corporate Bond ETF (QLTA)
• Vanguard Intermediate-Term Corporate Bond ETF (VCIT)
• SPDR Portfolio Intermediate Term Corporate Bond ETF (SPIB)

Expense Ratio

SLQD has a minimal expense ratio of 0.05%.

Investment Approach and Strategy

Strategy: SLQD passively tracks the Bloomberg Barclays US Corporate 2033 Maturity Index, replicating its composition and aiming to deliver similar returns.

Composition: The ETF primarily holds investment-grade corporate bonds issued by companies in various sectors.

Key Points

• Low-cost, passively managed ETF offering exposure to intermediate-term corporate bonds.
• Tracks the Bloomberg Barclays US Corporate 2033 Maturity Index closely.
• Aims for long-term capital appreciation through bond price movements and interest income.
• Highly liquid and transparent, with diverse exposure to high-quality corporate bonds.

Risks

Volatility: Bond prices can fluctuate due to interest rate changes, economic factors, and issuer credit risk, leading to potential volatility in the ETF's value.

Market Risk: SLQD's performance is tied to the performance of the underlying corporate bond market, which can be impacted by various systemic and sector-specific factors.

Credit Risk: The bonds held by SLQD carry varying levels of credit risk, meaning an issuer could default on its debt obligation, impacting the value of the ETF's holdings.

Who Should Consider Investing?

SLQD is suitable for investors seeking:

• Long-term capital appreciation potential through investment-grade corporate bonds.
• Exposure to the intermediate-term corporate bond market with mitigated individual issuer risk.
• A low-cost and passively managed investment vehicle aligned with their risk tolerance.

Fundamental Rating Based on AI (1-10)

With its strong fundamentals, including competitive expense ratios, efficient tracking, and diversified exposure to an intermediate-term maturity segment, SLQD earns a solid 8 out of 10 fundamental rating based on AI analysis. This rating suggests SLQD's potential to deliver attractive returns within the intermediate-term corporate bond space.

Disclaimer: This analysis uses publicly available information and AI-based insights as of November 3, 2023. This analysis should not be considered financial advice. Please consult with a professional financial advisor for personalized investment guidance.