State Street SPDR Portfolio Intermediate Term Corporate Bond ETF

SPIB

Market cap $11B

A compelling observation was made by Jeffrey Sherman, deputy chief investment officer at DoubleLine, on stage at the Astoria Advisors Macro Summit. He had just stated, “As a bond investor, I'm here to tell you that we're not special, but that we tend to be more risk-averse.

SPDR® Portfolio Intermediate Term Corporate Bond ETF offers efficient intermediate duration exposure with low expenses compared to Treasury ETFs. SPIB's 4.08-year duration makes it sensitive to Fed rate decisions and YTM changes, but current credit spreads are historically low, limiting upside. Ambiguous macro signals: headline labor market data might stabilize, but concerns remain about reinflation risks. Also, the real economic state of the laborers is in question.

Taking on credit risk but not interest rate risk has been relatively rewarding to ETF advisors and investors thus far in 2024. The iShares Broad USD High Yield Corporate Bond ETF (USHY) had a year-to-date total return of 3.6% as of July 8.

High-quality bonds may outperform stocks in the near future, with the potential for increased credit risk. SPDR® Portfolio Intermediate Term Corporate Bond ETF offers a low-fee option for income-minded investors to boost their fixed-income yield. The SPIB ETF provides broad diversification, strong yield, and low-cost exposure, but there is still some credit risk to consider.

Hello! For this week's ETF Wrap, I caught up with Michael Arone, State Street's chief investment strategist, at the Exchange ETF conference in Miami. He shared his take on bonds as ETF investors look for clues as to when the Federal Reserve may cut interest rates.