Related: Why Bond Investors Should Look Beyond Index ETFs
“Given bonds’ performance since the end of 2016 and their current composure based on yield, duration and credit spread, investors may be well served to focus on their short-term positions, focusing on floating rates (investment grade and senior loans) that have the most optimal yield and duration exposure (yield per unit of duration),” said SSgA.
STOT holds just over 200 bonds and has a current yield of 2.48%. With Treasuries and mortgage-backed securities (MBS) representing nearly two-thirds of the fund’s weight, credit risk is not an issue as highlighted by an almost 73% weight to AAA-rated bonds.
For more information on the fixed-income space, visit our bond ETFs category.