Megaphone icon ETF Database is now VettaFi. Read More >
ETFdb Logo
ETFdb Logo
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • Entrepreneur ETF
    • Equity ETF
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Future ETFs
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Modern Alpha
    • Multi-Asset
    • Multi-Factor
    • Nasdaq Investment Intelligence
    • Portfolio Strategies
    • Retirement Income
    • Smart Beta
    • Thematic Investing
    • Volatility Resource
  • Database
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
    • ETFs Future-Forward 2021: An iShares Investing Symposium
    • Three Themes for 2021: An iShares & MSCI Investing Symposium
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Videos & Podcasts
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. This Week’s ETF Launches: The First Bond ETF Focused on the S&P 500
News
Share

This Week’s ETF Launches: The First Bond ETF Focused on the S&P 500

David DierkingMay 09, 2018
2018-05-09

The S&P 500 is known as one of the most iconic benchmarks of the equities markets.

This week, it becomes a benchmark for bonds as well, thanks to a new fund launched by ProShares. Plus, USCF adds another commodities-focused product to its lineup that’s designed to help investors avoid tax headaches.

Here are this week’s new fund launches:

TickerNameIssuerLaunch DateETFdb.com CategoryExpense Ratio
(SPXB)ProShares S&P 500 Bond ETFProShares05/01/2018Corporate Bonds0.15%
(SDCI)USCF SummerHaven Dynamic Commodity Strategy No K-1 FundU.S. Commodity Funds05/03/2018Commodities0.80%


Content continues below advertisement

For a list of all new ETF launches, take a look at our ETF Launch Center.

Going After the Best Bonds from the Biggest Companies

It seems like such a simple and straightforward concept, but, believe it or not, it’s a strategy that hasn’t been implemented until now. The ProShares S&P 500 Bond ETF (SPXB) seeks to select the most liquid investment-grade bonds from companies in the S&P 500. Of the entire universe of bonds issued by these companies, the index selects up to 1,000 of the most liquid bonds that must be issued by companies that are members of the S&P 500, be rated investment-grade, be issued in the United States, have a remaining maturity of at least one year, have a maturity upon issuance of at least 2 ½ years and have a minimum par value of $750 million. The 1,000 bonds with the greatest liquidity are included in the index and are weighted by market value.

As you might expect, the fund is filled with some of the biggest bond issuers around, including Verizon (VZ), Apple (AAPL), General Electric (GE), AT&T and Goldman Sachs. It’s also weighted quite heavily toward financial and industrial companies. According to the fund’s fact sheet, the index has a weighted average maturity of 11.5 years and an effective duration of 7.7 years. Those numbers put this bond fund in the riskier category, which could be a problem for investors if interest rates continue to rise as expected. The fund’s index currently sports a yield of 3.73%.

For more ETF news and analysis, subscribe to our free newsletter.

USCF Joins the “K-1 Free” Movement

Commodities make a greater portfolio diversification tool since they traditionally have low correlations with other assets. The problem is that many exchange-traded products associated with commodities are structured as partnerships, not ETFs. That can turn into a real headache at tax time since investors get a K-1 form instead of a traditional 1099. The ETF industry, however, has responded by offering commodities funds that provide exposure to the sector without the annoying K-1 form.

The USCF SummerHaven Dynamic Commodity Strategy No K-1 Fund (SDCI) is technically an actively managed fund and seeks to provide exposure to the commodities markets that corresponds to the SummerHaven Dynamic Commodity Index Total Return. This is the same index that another USCF fund, the United States Commodity Index Fund (USCI A-), tracks as well. The main difference is that USCI comes with the K-1 form, whereas SDCI does not.

The fund’s underlying index is comprised of the futures contracts of 14 different commodities, weighted equally, from a universe of 27 eligible commodities in total. The potential list of commodities includes crude oil, natural gas, gold, silver, copper, tin, soybeans, sugar, cotton, coffee and live cattle among others. The index is constructed on the theory that commodities in lower supply tend to outperform those that are in higher supply. It looks at the degrees of backwardation, contango and momentum to identify which commodities make for better potential investments at a given time. The seven commodities with the highest degree of backwardation, the condition where futures prices are below current spot prices, make the cut, followed by the seven remaining commodities with the greatest price momentum. The index is reconstituted and rebalanced monthly.

The Bottom Line

It will be interesting to see how much the link to the S&P 500 index will mean for SPXB. There are numerous funds targeting investment-grade bonds and long-term bonds, but the focus on bonds issued specifically by companies within the S&P 500 should help investors feel more comfortable knowing that they are buying notes from the biggest and most successful companies in the world. For SDCI, moving toward commodity funds that issue 1099s over K-1s is a trend that has been growing lately. Along with USCF, companies, such as GraniteShares, ETF Securities and ProShares, have already launched their own “K-1 Free” ETFs to make life a little easier for investors, a trend which can reasonably be expected to continue.

ETFdb.com has ETF investing guides and other ebooks to help you navigate the investing landscape using ETFs. Sign up to ETF Database Pro to get access to all the PDFs located on our ETF Guides page.

» Popular Pages

  • Tickers
  • Articles

May 25

The Thread Grows Larger as Needle Shrinks

May 25

Yahoo Finance: Dave Nadig Talks Alternative Allocations

May 25

ETF Leaders Powered by the NYSE: Gunjan Chauhan

May 25

Gold Could Reach $5,000 by 2030

May 25

SEC Considers Stricter ESG Disclosure Requirements

May 25

Best & Worst Monthly Performers: May 25 Edition

May 25

Canterbury: May Market Video

May 25

Ethereum's Long-Term Allure Is Evident

May 25

Insurers Own More ETFs Than You Think

May 25

Focus on FMET for Metaverse Equity Bargains

QQQ

Invesco QQQ Trust

SPY

SPDR S&P 500 ETF Trust

VOO

Vanguard S&P 500 ETF

ARKK

ARK Innovation ETF

XLE

Energy Select Sector SPDR...

DBA

Invesco DB Agriculture Fund

VTI

Vanguard Total Stock Market...

VGT

Vanguard Information...

WEAT

Teucrium Wheat Fund

SCHD

Schwab US Dividend Equity ETF...


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
  • Mission Statement
  • Press
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © ETF Flows LLC
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

Equity ETF Channel

Retirement Portfolio Redux: Is the 60%-40% Portfolio Dead?

Debbie CarlsonOct 22, 2020
2020-10-22

With the 10-year U.S. Treasury yield hovering below 1% and Federal Reserve Chairman Jerome Powell...

Equity ETF Channel

Portfolio Diversification Isn't Dead, It Was Just Sleeping

Debbie CarlsonOct 15, 2020
2020-10-15

Investors could be forgiven to think there was no reason to invest outside of the U.S. for the...

}
X