A strong management team and sound investment process underpin SPDR® Blmbg Convert Secs ETF's Morningstar Medalist Rating of Bronze. The portfolio maintains a cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The strategy’s management team earns an Above Average People Pillar rating. The strategy's investment approach stands out and earns an Above Average Process Pillar rating. The strategy's parent organization earns the firm an Above Average Parent Pillar rating, and this rating is inherited from vehicles belonging to the same branding entity and is indirectly assigned by an analyst.

Analyst Rating

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Morningstar's style-agnostic investment process evaluation looks for strategies with a philosophy distinctive enough to generate excellent results in the future. SPDR® Blmbg Convert Secs ETF earns an Above Average Process Pillar rating. The predominant contributor to the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. The parent firm's five-year risk-adjusted success ratio of 58% also supports the process. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median Morningstar Risk-Adjusted Return for the period. Their respectable success ratio suggests that the firm does well for investors and that this fund may benefit from that. Lastly, the process is limited by the parent firm's five-year retention rate of 74%, which suggests it could do more to retain its portfolio managers.

The investment strategy as stated in the fund's prospectus is as follows: 

The investment seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Bloomberg U.S. Convertible Liquid Bond Index.  The fund generally invests substantially all, but at least 80%, of its total assets in the securities comprising the index and in securities that the Adviser determines have economic characteristics that are substantially identical to the economic characteristics of the securities that comprise the index. The index is designed to represent the market of U.S. convertible securities, and such as convertible bonds and convertible preferred stock.  

 SPDR® Blmbg Convert Secs ETF is currently in the Convertibles Morningstar Category.The portfolio is composed of 286 holdings and is diversified among those holdings. In its most recent portfolio, 13.3% of the portfolio's assets were concentrated in the top 10 fund holdings, compared to the category’s 68.9% average.  And, in terms of portfolio turnover, looking at year-over-year movements, 7% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Above Average

Process

SPDR® Blmbg Convert Secs ETF benefits considerably from its allocation team, earning it an Above Average People Pillar rating. There are two managers listed on the fund: Michael Brunell, Christopher DiStefano. The team is well equipped, with an average of 15 years of portfolio management experience. Though they do not manage other products together, managers may manage them individually. This group has successfully retained management talent, with no departures in the past five years. 

 Note: The People Pillar rating is indirectly assigned by an analyst. The longest-tenured manager of the fund also manages a different product rated by an analyst. Their analyst-assigned People Pillar rating is combined here with the People scores (algorithmic or analyst-assigned) for the fund’s other managers on a tenure-weighted basis.

People

State Street Global Advisors is under new leadership but continues to move along the positive trajectory established by former leaders. SSGA maintains its Above Average Parent Pillar rating.
Cyrus Taraporevala, who oversaw much of SSGA’s recent transformation, retired from the CEO position in December 2022 and passed the baton to his successor, Yie-Hsin Hung. She inherited a business that’s become more disciplined with its fund lineup. Fees have come down, while product development remains focused on fixed-income and sustainability funds, and many of SSGA’s launches have echoed that intention.
The seeds that SSGA planted over the past several years have been bearing fruit. It built out a low-cost series of portfolio building-block ETFs in the U.S. bearing the “SPDR Portfolio” branding. SSGA launched these later than its industry rivals, so they aren’t as large. But they’re competitive, with solid management and low fees, which helped them consistently take in new money over the past several years.
SSGA continued to overhaul its ETF business in Europe with most of its recent fixed-income and sustainability fund launches. Many of these funds track indexes and charge relatively low fees. With operations in the U.S. and Europe standing on a firm foundation, SSGA will put more focus on its Asia-Pacific business—the smallest regional segment of its business.

Parent

SPDR Bloomberg Convertible Securities ETF

CWB tracks a market-cap weighted index of US convertible securities of any credit quality.

SPDR® Bloomberg Convertible Securities ETF holds a portfolio of convertible securities and is well-diversified. The CWB ETF is a hybrid asset with characteristics of both equity and fixed income, and its behavior is closer to a stock index than a bond index. CWB doesn't look attractive as a long-term investment, but it is a good instrument for tactical allocation in a rotational model.

CWB: A Useful Tactical Allocation Instrument

CWB offers investors a way to access innovative companies but with historically lower risk than small cap stock ETFs like IWM. Convertible bonds have a favorable reward/risk profile over many years, with equity-like returns alongside payment of principal built into these securities. Credit markets' future refinancing needs, the so-called maturity wall, bode well for convertible demand as an alternative to traditional bonds' higher interest expense.

CWB: Solid Convertible Bond ETF For Total Return Or A Small Cap Alternative

Rising long-term interest rates make long-term treasuries a viable alternative to equities, with potential for downside protection. Convertible bonds offer characteristics of both stocks and bonds, providing upside potential and income potential in declining equity markets. The SPDR Bloomberg Convertible Securities ETF is the largest convertible ETF, but it has underperformed stocks and high yield bonds in the past year.

CWB: Convertibles Offer No Competitive Yield

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When considering that convertible bonds are among the fixed income assets that behave most like stocks, 2022 was a dreadful year to be engaged with this asset class. The SPDR Barclays Convertible Securities ETF (NYSEArca: CWB), which is the largest exchange traded fund dedicated to convertible bonds, slid 20.

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Canadian Western Bank (OTCPK:CBWBF) Q3 2022 Earnings Conference Call August 26, 2022 10:00 AM ET Company Participants Patrick Gallagher - Vice President, Strategy and Investor Relations Chris Fowler - President and Chief Executive Officer Matt Rudd - Chief Financial Officer Conference Call Participants Gabriel Dechaine - National Bank Financial Nigel D'Souza - Veritas Sohrab Movahedi - BMO Meny Grauman - Scotiabank Lemar Persaud - Cormark Doug Young - Desjardins Capital Markets Mike Rizvanovic - KBW Paul Holden - CIBC Joo Ho Kim - Credit Suisse Operator Good morning. My name is Joanna and I will be your conference operator today.

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