The SPDR Bloomberg Barclays High Yield Bond ETF (JNK) is managed by SSGA Funds Management, Inc. (SSGA FM), serving as the investment adviser to the Fund. JNK seeks to track the performance of the Bloomberg High Yield Very Liquid Index, employing a sampling strategy to maintain a portfolio with similar risk and return characteristics to the Index. Under normal market conditions, JNK invests substantially all, but at least 80%, of its total assets in the securities comprising the Index and those with economic characteristics closely resembling them. Additionally, the Fund may utilize derivatives, including credit default swaps and credit default index swaps, to align its investment exposure with the Index. The Bloomberg High Yield Very Liquid Index measures the performance of publicly issued U.S. dollar-denominated high-yield corporate bonds with above-average liquidity. It includes non-investment-grade fixed-rate taxable corporate bonds with remaining maturities of one to fifteen years, provided they meet certain rating and outstanding face value criteria. Exposure to each eligible issuer is capped at two percent of the Index, and the Index only covers corporate categories, including Industrial, Utility, and Financial Institutions. The Index is issuer capped and updated monthly by Bloomberg Index Services Limited, an independent entity unrelated to the Fund or its adviser. As of August 31, 2022, the Fund's portfolio had a significant portion of holdings in the consumer cyclical and communication services sectors, subject to change over time.
While the primary objective of the SPDR Bloomberg Barclays High Yield Bond ETF (JNK) is to track the performance of the Bloomberg High Yield Very Liquid Index, its dividend distribution aligns with the income generated from the underlying high-yield corporate bonds. Dividends from JNK are typically distributed to investors on a monthly basis. These dividends are influenced by the interest income earned by the fund's portfolio, and the frequency of distributions may vary based on prevailing market conditions. The ETF employs a sampling strategy, allowing it to hold a subset of the securities in the Index to replicate its risk and return characteristics. JNK primarily invests in high-yield corporate bonds that are rated below investment-grade, commonly known as junk bonds. To be eligible for inclusion in the Index, a bond must meet certain criteria, including having a remaining maturity of at least one year, being rated high-yield by rating agencies, and having a significant outstanding face value. The ETF may also use derivatives to manage its exposure and cash flows effectively.
Tracking the Bloomberg High Yield Very Liquid Index is at the core of the SPDR Bloomberg Barclays High Yield Bond ETF's strategy. JNK employs a sampling strategy to closely align with the index, aiming to hold a portfolio of securities with generally the same risk and return characteristics. Under normal market conditions, JNK generally invests at least 80% of its total assets in the securities comprising the Index, including non-investment-grade, fixed-rate, taxable corporate bonds with maturities ranging from one to fifteen years. JNK may also use derivatives and may concentrate its assets in industries that align with the Index. The Index is designed to measure the performance of U.S. dollar-denominated high yield corporate bonds with above-average liquidity, commonly known as junk bonds, and is maintained by Bloomberg Index Services Limited, an independent entity not affiliated with the ETF or its adviser. As of the most recent data, JNK primarily comprises companies in the consumer cyclical and communication services sectors, subject to change over time.
The correlation aspect of the SPDR Bloomberg Barclays High Yield Bond ETF (JNK) is instrumental in understanding its performance and risk profile. JNK seeks to track the Bloomberg High Yield Very Liquid Index, comprising high-yield corporate bonds. Given its focus on high-yield bonds, JNK typically exhibits a strong positive correlation with overall market sentiment and interest rates. Investors often analyze JNK's correlation with other asset classes and economic indicators to gauge the level of risk and return associated with high-yield bonds.
The SPDR Bloomberg Barclays High Yield Bond ETF (JNK) primarily focuses on the high-yield corporate bond sector. JNK invests in a diversified portfolio of U.S. dollar-denominated, non-investment-grade, fixed-rate, taxable corporate bonds with maturities ranging from one to fifteen years. These bonds are commonly referred to as junk bonds due to their below-investment-grade credit ratings. The ETF may include bonds from various industries such as industrial, utility, and financial institutions, with a strong emphasis on the consumer cyclical and communication services sectors as of the latest available data. Investors in JNK should be aware of the higher risk associated with high-yield bonds but may seek potentially higher yields in their portfolios.
The exposure characteristic of the SPDR Bloomberg High Yield Bond ETF (JNK) is centered around providing investors with exposure to the high-yield corporate bond market in the United States. JNK aims to track the performance of the Bloomberg High Yield Very Liquid Index, which includes publicly issued U.S. dollar-denominated high-yield corporate bonds with above-average liquidity. This ETF primarily invests in non-investment-grade, fixed-rate, taxable corporate bonds with maturities ranging from one to fifteen years, offering investors access to the high-yield segment of the bond market. To achieve its objective, JNK may also invest in debt securities that are not included in the index, utilize derivatives, and manage cash flows, with a focus on the consumer cyclical and communication services sectors.
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