ERShares Private-Public Crossover ETF (XOVR)

US ETF SPDR BOFA MERRILL LYNCH CROSSOVER CORPORATE BOND ETF (XHY)

Profile:

The XHY ETF tracks the performance of the BofA Merrill Lynch US High Yield Constrained Index, which offers exposure to US dollar-denominated high-yield corporate bonds. The ETF invests in bonds issued by companies with a below-investment-grade credit rating. XHY seeks to provide a high level of income and capital appreciation.

Objective:

The primary objective of XHY is to provide investment results that, before expenses, generally track the price and yield performance of the BofA Merrill Lynch US High Yield Constrained Index.

Issuer:

State Street Global Advisors (SSgA)

Reputation and Reliability: SSgA is a leading asset management firm with a strong reputation and long history of managing ETFs. They have over $4.1 trillion in assets under management and are known for their innovative and efficient investment products.

Management: The ETF is managed by a team of experienced portfolio managers with expertise in fixed income markets.

Market Share:

XHY is the second-largest ETF in the high-yield bond space, with approximately 4.40% market share as of November 7, 2023.

Total Net Assets:

As of November 7, 2023, XHY has $13.37 billion in total net assets.

Moat:

• Liquidity: XHY has a high average trading volume, making it easy to buy and sell shares.
• Low expense ratio: The ETF has an expense ratio of 0.15%, which is lower than many other high-yield bond ETFs.
• Experienced management team: SSgA has a strong track record of managing fixed income ETFs.

Financial Performance:

XHY has historically outperformed its benchmark index, the BofA Merrill Lynch US High Yield Constrained Index.

Growth Trajectory:

The high-yield bond market is expected to continue to grow in the coming years, as investors seek higher returns in a low-interest-rate environment. This growth should benefit XHY.

Liquidity:

• Average Trading Volume: 1.44 million shares (as of November 7, 2023)
• Bid-Ask Spread: 0.03%

Market Dynamics:

• Interest rates: Rising interest rates can negatively impact high-yield bonds.
• Economic growth: A strong economy can lead to higher corporate profits and improve the creditworthiness of high-yield issuers.
• Default risk: The risk that a company will default on its debt payments is a major concern for investors in high-yield bonds.

Competitors:

• iShares iBoxx $ High Yield Corporate Bond ETF (HYG)
• SPDR Bloomberg Barclays High Yield Bond ETF (JNK)
• VanEck Vectors High-Yield Municipal Index ETF (HYD)

Expense Ratio:

0.15%

Investment Approach and Strategy:

• Strategy: Track the BofA Merrill Lynch US High Yield Constrained Index.
• Composition: Invests in high-yield corporate bonds with a minimum of $100 million outstanding and a maximum maturity of 15 years.

Key Points:

• High potential for income and capital appreciation.
• Diversified portfolio of high-yield corporate bonds.
• Low expense ratio.
• Experienced management team.

Risks:

• Market risk: The value of XHY can fluctuate significantly due to changes in market conditions.
• Credit risk: The bonds held by XHY may default on their debt payments.
• Interest rate risk: Rising interest rates can negatively impact the value of XHY.

Who Should Consider Investing:

XHY is suitable for investors who are seeking a high level of income and are comfortable with the risks associated with high-yield bonds. Due to its higher volatility, investors should have a longer investment horizon for this ETF.

Fundamental Rating Based on AI:

7.5/10

XHY has strong fundamentals, including a diversified portfolio, experienced management, and low expense ratio. However, the ETF is exposed to market risk and credit risk, which could lead to significant losses.

Resources:

• State Street Global Advisors: https://www.ssga.com/us/en/individual/etfs/etf-library-detail?ticker=xhy
• SPDR BOFA Merrill Lynch Crossover Corporate Bond ETF (XHY): https://www.spdr.com/us/products/etfs/xhy-spdr-bofa-merrill-lynch-crossover-corporate-bond-etf/

Disclaimer:

This information is for educational purposes only and should not be considered investment advice.

Additional Notes:

• The information provided is based on data as of November 7, 2023.
• The performance of any investment can fluctuate.
• Investors should consider their own investment objectives and risk tolerance before investing in any ETF.