Investment Ideas

Build a Strong Low-Cost Core Portfolio

Two of our low cost offerings are getting even lower

Effective March 24, 2021, the net expense ratio for SPDR® Portfolio High Yield Bond ETF (SPHY) has been reduced to 0.10% and the net expense ratio for the SPDR® Portfolio Mortgage Backed Bond ETF (SPMB) has been reduced to 0.04%, making the funds the lowest cost high yield and mortgage-backed bond ETFs, respectively.*

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* Source: Bloomberg Finance L.P. as of March 24, 2021.

Focus on the Foundation

A strong flexible portfolio begins with the core. It provides a stable foundation to pursue specific investment goals—from managing risk and generating income to growing capital through diversification.

But core investing shouldn’t be costly. Instead, investors should have confidence that they aren’t overpaying for returns in the largest part of their portfolio.

The best core holdings offer:

  • Diversification ETFs usually track an index, so investors can get a basket of holdings in one simple trade 
  • Low cost ETFs generally have lower fees than mutual funds, making them ideal for a core portfolio
  • Liquidity ETFs trade daily on exchange, and have multiple layers of liquidity through the unique creation/redemption mechanism, enabling investors to get in and out of their investment whenever the market is open
  • Transparency Investors can see exactly what is included in an ETF on a daily basis
  • Tax efficiency Investors typically are taxed only upon selling an ETF investment, whereas mutual funds incur such burdens over the course of the investment 

These attributes may make ETFs an ideal core holding.

Meeting Investment Goals

The Leading Driver of Portfolio Returns

Asset allocation—the mix of stocks, bonds and cash in a portfolio—explains 90% of the variance in portfolio returns.2 Changing the weighting of these investments alters the risk profile of a portfolio, and therefore the potential return.

Allocate with Ease for Any Risk Appetite

With as few as three low-cost SPDR Portfolio ETFs, investors can easily build a diversified core portfolio of stocks and bonds. From conservative to aggressive allocations, the following five risk-based examples can be tailored to meet different investment objectives—each with a weighted-average cost just under 4 basis points (bps).

Get More For Less

It's simple: high costs erode returns. So the largest part of your portfolio should never be the most expensive. Every little basis point counts.

SPDR Portfolio ETFs are diversified and tax-efficient stock and bond index funds, available from as little as 3 bps. Covering US equity, international equity and fixed income asset classes, they are designed to help investors allocate for the long-term. They have a median cost 93% lower than the median US-listed mutual fund.3