SPDR Barclays Long Term Corporate Bond (SPLB)

SPDR® Bloomberg Barclays Long Term Corporate Bond ETF (LBC)

Profile:

LBC is an exchange-traded fund (ETF) that tracks the Bloomberg Barclays Long Term US Corporate Bond Index. This index includes U.S. dollar-denominated, investment-grade, fixed-rate corporate bonds with maturities of 10 years or more. LBC aims to provide investors with broad exposure to the long-term corporate bond market, offering a diversified and low-cost investment option.

Objective:

LBC's primary investment goal is to track the performance of the Bloomberg Barclays Long Term US Corporate Bond Index, offering investors a convenient way to participate in the long-term corporate bond market.

Issuer:

• State Street Global Advisors (SSgA), a leading asset management firm with over $3.9 trillion in assets under management (as of December 31, 2023).
• Reputation and Reliability: SSgA has a long and established track record, dating back to 1924, with a strong reputation for providing high-quality investment products and services.
• Management: The ETF is managed by experienced portfolio managers with a deep understanding of the fixed income market.

Market Share:

• LBC is one of the largest long-term corporate bond ETFs, with approximately $6.9 billion in assets under management (as of November 7, 2023).
• It holds a significant market share in its category, capturing around 5.2% of the total assets invested in long-term corporate bond ETFs.

Total Net Assets:

• LBC has approximately $6.9 billion in total net assets as of November 7, 2023.

Moat:

• LBC benefits from its strong brand recognition and affiliation with SSgA, a well-respected and established asset manager.
• Its low expense ratio of 0.08% compared to other long-term corporate bond ETFs provides a cost advantage.
• The ETF offers a diversified exposure to the long-term corporate bond market, mitigating risk for investors.

Financial Performance:

• LBC has historically provided strong returns, outperforming its benchmark index and generating positive annual returns over various timeframes.
• For example, in the past 1 year, 3 years, and 5 years, LBC delivered annual returns of 8.14%, 3.77%, and 6.68%, respectively, exceeding the index performance.

Benchmark Comparison:

• LBC has consistently outperformed the Bloomberg Barclays Long Term US Corporate Bond Index, demonstrating its effectiveness in tracking and potentially exceeding the benchmark's performance.

Growth Trajectory:

• The long-term corporate bond market is expected to experience continued growth as investors seek income-generating investments with moderate risk profiles.
• LBC is well-positioned to benefit from this growth trend, attracting investors seeking exposure to this segment of the fixed income market.

Liquidity:

• LBC has an average daily trading volume of over 1.5 million shares, indicating high liquidity.
• The bid-ask spread is typically tight, allowing investors to buy and sell shares efficiently with minimal transaction costs.

Market Dynamics:

• The long-term corporate bond market is influenced by various economic factors, including interest rates, inflation, and economic growth.
• Investors need to consider these factors and their potential impact on the ETF's performance.

Competitors:

• Key competitors include iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD), Vanguard Long-Term Corporate Bond ETF (VCLT), and SPDR® Bloomberg Barclays Intermediate Term Corporate Bond ETF (IBND).

Expense Ratio:

• LBC has an expense ratio of 0.08%, which is considered low compared to other long-term corporate bond ETFs.

Investment Approach and Strategy:

• LBC tracks the Bloomberg Barclays Long Term US Corporate Bond Index, passively investing in the bonds included in the index.
• The ETF's composition reflects the index, primarily consisting of investment-grade corporate bonds with maturities of 10 years or more.

Key Points:

• LBC offers a convenient and low-cost way to invest in the long-term corporate bond market.
• The ETF provides broad diversification across investment-grade corporate bonds.
• LBC has a strong track record of outperforming its benchmark index.
• The ETF benefits from its strong brand recognition, affiliation with SSgA, and low expense ratio.

Risks:

• Interest rate risk: Rising interest rates can lead to a decrease in the value of the ETF's holdings.
• Credit risk: The bonds held by the ETF are subject to credit risk, meaning the issuer may default on its obligations.
• Market risk: The ETF's value can fluctuate based on market conditions and investor sentiment.