SPDR Portfolio High Yield Bond ETF (4JZL)
XBER 
Summary
4JZL Chart
SPHY: My HY Passive Pick, But Watch Out For The OAS
State Street® SPDR® Portfolio High Yield Bond ETF is a US ETF that invests in below-investment-grade corporate bonds. In my opinion, it remains competitive both among the solutions within SPDR and among the most competitive solutions on the market. The risk of repricing, or an increase in the default rate, would accentuate the inversion of the OAS, making SPHY, in my opinion, less convenient.
SPHY: Less Attractive In Risk-Reward
State Street SPDR Portfolio High Yield Bond ETF offers broad, low-cost exposure to US dollar-denominated high-yield bonds, closely tracking its benchmark. SPHY's portfolio is diversified, with moderate duration, strong sector replication, and a focus on higher-quality high-yield debt, yielding around 7% annually. Current market conditions—compressed spreads and rising Treasury term premiums—make the risk-return profile less attractive compared to safer alternatives.
SPHY: Historically Tight High-Yield Spread Keeps Me On The Sidelines
I reiterate a hold rating on SPHY, as high-yield spreads are tight and upside appears limited despite a strong macro backdrop. SPHY offers a reasonable yield near 7%, low expenses, and solid liquidity, making it a decent choice for retail investors in tax-sheltered accounts. Technical signals are mixed, with shares stuck below $24 resistance and a flat 200-day moving average, suggesting continued range-bound trading.
SPDR Portfolio High Yield Bond ETF (4JZL) FAQ
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SPDR Portfolio High Yield Bond ETF Profile
| XBER Exchange | US Country |
Overview
The company operates within the financial sector, specifically focusing on investment strategies that largely involve the allocation of assets into securities that form part of a certain index. This index is particularly targeted at measuring the performance of below investment grade (high yield or junk) U.S. dollar-denominated corporate debt that is publicly issued in the U.S. domestic market. It commits to investing at least 80% of its total assets in securities making up the index, along with those that the Adviser believes possess economic characteristics closely mirroring those of the index’s securities. This approach ensures that the fund's investment strategy is closely aligned with the performance of the specified index, aiming to provide investors with returns that reflect the U.S. high-yield corporate debt market.
Products and Services
- Index-Aligned Investment Funds
This product is primarily focused on investing the bulk of the fund's assets into securities that are part of a predefined index. The index is carefully selected to represent a specific segment of the market, in this case, U.S. dollar-denominated, below investment grade corporate debt. This strategy aims to replicate the index's performance, offering investors exposure to this particular sector of the financial market.
- High Yield Corporate Debt Investment
As part of its core service offerings, the fund specializes in investing in high yield, or below investment grade, corporate debt securities. These securities are typically issued by companies that are considered to carry a greater risk of default compared to more creditworthy, investment-grade issuers. However, they offer the potential for higher yields, making them an attractive investment option for those willing to accept increased risk for the possibility of greater returns. By focusing on this segment, the fund provides a vehicle for investors to gain exposure to high-yield debt instruments, with the aim of achieving higher income and diversification benefits within their investment portfolios.
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