For instance, a re-weighted aggregate bond portfolio would include government debt exposure, such as the SPDR Barclays Short Term Treasury ETF (NYSEArca: SST) and SPDR Barclays Intermediate Term Treasury ETF (NYSEArca: ITE), and corporate bond exposure, inclulding the SPDR Barclays Short Term Corporate Bond ETF (NYSEArca: SCPB), SPDR Barclays Intermediate Term Corporate Bond ETF (NYSEArca: ITR) and SPDR Barclays Long Term Corporate Bond ETF (NYSEArca: LWC), along with securitized debt through SPDR Barclays Mortgage Backed Bond ETF (NYSEArca: MBG).
Alternatively, the strategists point out that investors can expand on the aggregate bond portfolio with below investment-grade debt and floating rate exposure to potentially increase yield while lowering the portfolio’s overall duration.
For example, the SPDR Barclays Investment Grade Floating Rate ETF (NYSEArca: FLRN) tracks investment-grade quality corporate debt that adjusts or floats its interest rate in response to the rest of the market. The SPDR Blackstone/GSO Senior Loan ETF (NYSEArca: SRLN) also floats its rate but includes speculative-grade debt holdings. The SPDR Barclays Short Term High Yield Bond ETF (NSYEArca: SJNK) tracks junk bonds with a focus on short duration. Alternatively, the SPDR BofA Merrill Lynch Cross Over Corporate Bond ETF (NYSEArca: XOVR) includes so-called cross over debt, which has less credit risk than many high yield bonds and generally offers higher yields than most investment grade bonds.
Financial advisors who are interested in learning more about investing in fixed-income assets can listen to the webcast here on demand.