State Street® SPDR® Portfolio Short Term Corporate Bond ETF

What this fund is

State Street® SPDR® Portfolio Short Term Corporate Bond ETF is an exchange-traded fund (ETF) from SPDR, traded under the ticker SPSB (ISIN US78464A4748). It lets you buy a basket of holdings in a single trade, spreading your money across them rather than one company. In plain terms it is about lending to governments and companies in return for regular interest, which tends to be steadier than shares but grows more slowly, spread across its target market. It follows the Bloomberg U.S.

1-3 Year Corporate Bond Index index (passive investing): it tracks the market rather than relying on a manager, keeping running costs down, and its largest holdings include SALESFORCE INC SR UNSECURED 03/29 4.65, AERCAP IRELAND CAP/GLOBA COMPANY GUAR 10/28 3 and BANK OF AMERICA CORP SR UNSECURED 12/28 VAR. With about 1625 holdings (the ten largest ≈ 4.1%), your money is diversified rather than concentrated in a handful of names. Funds like this are often used as the steadier, lower-swing part of a portfolio — the ballast that cushions the ups and downs of shares. Its ongoing charge (TER) is 0.04% a year — about €4 a year on a €10,000 holding, taken automatically from the fund.

It holds the underlying investments directly (physical replication); it is domiciled in the United States and trades in USD. Its price has swung about 1.8% over the past year, which describes how much its price tends to move rather than whether it is good. It launched in 2009. Like any investment, it can lose value as well as gain, and what it did before does not predict what it will do next. (Fund data sourced from SPDR.)