No holding accounts for more than 0.61% of SCPB’s weight. The ETF has another advantage, particularly if interest rates do in fact rise.
“Compared with longer-term bonds, short-duration investment grade bonds may benefit earlier from increased income from the fund’s underlying bonds in a rising rate environment,” said State Street in fixed income research published earlier this year. “Investors may wish to focus on corporate issues and avoid exposure to government-related sectors that are either highly leveraged or low yielding, which can be found in more traditional credit exposures.”
In what may be a sign that investors are betting on higher rates, SCPB has hauled in $740.5 million of its $3.66 billion in assets under management this year.
SPDR Barclays Short Term Corporate Bond ETF
Tom Lydon’s clients own shares of HYG, JNK and LQD.