SPAB: Good For What It Does, But Not Unique

seekingalpha05-19

ryasick ETFs are great in that they can provide cheap and easy access to a broad or specialized part of the marketplace in a single trade. Want to get exposure to bonds without choosing specific ones?...

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Want to get exposure to bonds without choosing specific ones?...</p>\n\n<a href=\"https://seekingalpha.com/article/4694348-spab-good-for-what-it-does-but-not-unique\">Source Link</a>\n\n</div>\n","source":"seekingalpha_fund","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>SPAB: Good For What It Does, But Not Unique</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSPAB: Good For What It Does, But Not Unique\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-05-19 15:13 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4694348-spab-good-for-what-it-does-but-not-unique><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>ryasick ETFs are great in that they can provide cheap and easy access to a broad or specialized part of the marketplace in a single trade. Want to get exposure to bonds without choosing specific ones?...</p>\n\n<a href=\"https://seekingalpha.com/article/4694348-spab-good-for-what-it-does-but-not-unique\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"FT_SY_ZB","symbol_name":"30年美债","start_time":0,"source_url":"https://seekingalpha.com/article/4694348-spab-good-for-what-it-does-but-not-unique","article_id":"2436574221","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/155095389/image_155095389.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2436574221","pubTimestamp":1716102805,"sourceInfo":{"source_id":"seekingalpha_fund","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"ryasick ETFs are great in that they can provide cheap and easy access to a broad or specialized part of the marketplace in a single trade. Want to get exposure to bonds without choosing specific ones?Well, then the SPDR Portfolio Aggregate Bond ETF  is worth considering. Bonds have long been a cornerstone of conservative investment strategies, offering stability and predictable returns. Yes - I clearly know that has NOT been the case the last three years, but that's more of an exception and not the rule. SPAB is essentially just providing broad exposure to the U.S. investment-grade bond market. Easy and simple. The index that SPAB is designed to track?","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"FDN":"First Trust Dow Jones Internet I","BK4588":"碎股","BK4550":"红杉资本持仓","GOVT":"iShares安硕核心美国国债ETF","BK4581":"高盛持仓","TLT":"20+年以上美国国债ETF-iShares","SPAB":"SPDR Portfolio Aggregate Bond ETF","BND":"债券指数ETF-Vanguard美国","SHY":"债券指数ETF-iShares Barclays 1-3年国债","IEF":"债券指数ETF-iShares Barclays 7-10年","AGG":"债券指数ETF-iShares Barclays综合国债","IEI":"iShares Barclays 3-7 Year Trea","BK4585":"ETF&股票定投概念","MBS":"ANGEL OAK MORTGAGE-BACKED SECURITIES ETF","CMBS":"Ishares Barclays Cmbs Bond Fund"},"translate_title":"SPAB：对它的作用很好，但不是唯一的","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"SPAB":1,"BND":1,"CMBS":1,"AGG":1,"MBS":1,"US7Y.BOND":0.9,"US12M.BOND":0.9,"US10Y.BOND":0.9,"US2Y.BOND":0.9,"US30Y.BOND":0.9,"US3Y.BOND":0.9,"US5Y.BOND":0.9,"US6M.BOND":0.9,"FDN":0.78,"SHY":0.6,"US912797FH58.BOND":0.6,"US912797FS14.BOND":0.6,"US912797GB79.BOND":0.6,"US912797GK78.BOND":0.6,"US912797GL51.BOND":0.6,"US912797GW17.BOND":0.6,"US912797HE00.BOND":0.6,"TLT":0.6,"IEI":0.6,"IEF":0.6,"GOVT":0.6,"ZTmain":0.6,"ZFmain":0.6,"ZBmain":0.6,"UBmain":0.6,"TNmain":0.6},"content_text":"ryasick ETFs are great in that they can provide cheap and easy access to a broad or specialized part of the marketplace in a single trade. Want to get exposure to bonds without choosing specific ones? Well, then the SPDR® Portfolio Aggregate Bond ETF (NYSEARCA:SPAB) is worth considering. Bonds have long been a cornerstone of conservative investment strategies, offering stability and predictable returns. Yes - I clearly know that has NOT been the case the last three years, but that's more of an exception and not the rule. SPAB is essentially just providing broad exposure to the U.S. investment-grade bond market. Easy and simple. The index that SPAB is designed to track? Well - it's the grandaddy of them all - the Bloomberg Barclays U.S. Aggregate Bond Index. This index is a widely recognized benchmark. It includes a range of U.S. investment-grade bonds, such as Treasuries, government-related and corporate securities, mortgage-backed securities (MBS), asset-backed securities (ABS), and commercial mortgage-backed securities (CMBS). Launched by State Street Global Advisors, SPAB essentially provides investors with a comprehensive, low-cost way to gain exposure to the entire U.S. bond market. With a gross expense ratio of just 0.03%, it is one of the most cost-effective options available. ETF Holdings No position in the fund makes up more than 0.83%. Remember, this is meant to provide broad exposure, so this shouldn't be a surprise. This is well diversified as a pure asset class play. ssga.com Sector Composition and Weightings Because this is a broad representation of the bond market, it shouldn't be surprising that such a large portion of the funds includes government debt. The breakdown is as follows.   Treasury (41.88%): This sector includes U.S. government bonds, which are considered the safest investments due to their backing by the full faith and credit of the U.S. government.  Mortgage-Backed Securities (25.55%): These are bonds secured by mortgages, offering higher yields compared to Treasuries but with slightly higher risk.  Corporate - Industrial (14.51%): This sector includes bonds issued by industrial corporations, providing higher yields and moderate risk.  Corporate - Finance (8.38%): Bonds issued by financial institutions, offering a balance of yield and risk.  Corporate - Utility (2.31%): Bonds from utility companies, known for their stable cash flows and lower risk.  CMBS (1.56%): Commercial mortgage-backed securities, which are backed by commercial real estate loans.  Non-Corporates - Supranationals (1.34%): Bonds issued by international organizations, offering diversification and stability.  Non-Corporates - Sovereigns (0.98%): Bonds issued by foreign governments, providing additional diversification.  Agency (0.89%): Bonds issued by U.S. government agencies, offering a high level of security.  Non-Corporates - Foreign Local Govt (0.84%): Bonds from foreign local governments, adding to the fund's diversification.  Non-Corporates - Foreign Agency (0.78%): Bonds from foreign government agencies, providing further diversification.  Cash (0.49%): Cash holdings for liquidity purposes.  Asset-Backed Securities (0.48%): Bonds backed by financial assets, such as credit card receivables or auto loans.  Peer Comparison When comparing SPAB to other competitors, such as the iShares Core U.S. Aggregate Bond ETF (AGG) and the Vanguard Total Bond Market ETF (BND), there's no real differentiator. All three ETFs aim to provide broad exposure to the U.S. bond market and track the Bloomberg Barclays U.S. Aggregate Bond Index. All funds have roughly the same expense ratio. So what's the argument for choosing SPAB over the others? Really, there is none. Performance wise, they've acted the same. stockcharts.com Pros and Cons Aside from the fact that it's largely the same as other funds tracking the same space, it's worth talking about the pros and cons here. The fund's low expense ratio is a significant benefit, allowing investors to keep more of their returns. Its broad diversification across various sectors of the bond market reduces risk and provides a stable income stream. The inclusion of high-quality securities, such as U.S. Treasuries and Ginnie Mae bonds, adds a layer of security to the investment. The fund's passive management approach ensures that it closely tracks the performance of the Bloomberg Barclays U.S. Aggregate Bond Index, providing (hopefully) reliable returns. The problem, if there is one? The fund's heavy allocation to U.S. Treasuries, while providing safety, has been, for lack of a better way of saying it, challenged with ballooning government debt and this duration sell-off for the last three years. In addition, the exposure to mortgage-backed securities, while offering higher yields, also introduces some level of prepayment and credit risk. Furthermore, the fund's performance is closely tied to interest rate movements. In a rising interest rate environment, bond prices typically fall, which could negatively impact the fund's returns, as we saw in this brutal cycle for bonds the last three years. Lastly, while the fund is diversified, it is still subject to market risks and may not perform well in all economic conditions. Conclusion  Bottom line? Nothing wrong with SPAB. It's a solid choice for investors seeking broad exposure to the U.S. investment-grade bond market. Its low expense ratio, diversified holdings, and focus on high-quality securities make it an attractive option for conservative investors looking to balance their portfolios with fixed-income assets. While there are some risks associated with interest rate movements and exposure to mortgage-backed securities, the fund's overall stability and potential for steady income make it a worthwhile consideration. Just don't agonize over using this fund relative to other broad bond proxies that track the same part of the marketplace.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.5","shortVersion":"4.22.5","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2436574221"}