Skip to main content

SPDR® DoubleLine Short Duration Total Return Tactical ETF (STOT) – Q1 2023 Commentary

For the first quarter of 2023, the SPDR DoubleLine Short Duration Total Return Tactical ETF (STOT) performed in line with the Bloomberg U.S. Aggregate 1-3 Year Index.



For the quarter ended March 31, 2023, the DoubleLine Short Duration Total Return Tactical ETF performed roughly in line with the Bloomberg U.S. Aggregate 1-3 Year Index return of 1.51%. After suffering one of the worst years in history, bond markets rallied in the first quarter of 2023, despite markedly elevated volatility. Coming off the January rally, US Treasurys sold off in February before retracing substantially in March amid the banking system turmoil. Although the full impact remains to be seen, the Federal Reserve stepped in to strengthen confidence in the banking system with the creation of its new Bank Term Funding Program. This helped reduce investor worries that bank failures, most notably Silicon Valley Bank, could lead to a broader contagion. The Federal Reserve raised its Federal Funds Effective policy rate by 50 basis points (bps) over the quarter, and the 2-year Treasury yield fell 40 bps, the 5-year fell 43 bps, and the 10-year fell 41 bps.1

Every sector in the portfolio generated a positive return, led by shorter-duration structured-credit, such as asset backed securities, commercial mortgage-backed securities (MBS), and collateralized loan obligations (CLOs). These assets enjoyed spread tightening, high levels of monthly interest income, and some duration-related price gains. US Treasurys generated the smallest positive return over the quarter as rates rose at the shorter end of the curve.

Standard Performance

  As Of QTD
1 Year
3 Year
5 Year
10 Year (%) Since Inception
Gross Expense Ratio (%) Net Expense
Ratio (%)
NAV Mar 31, 2023 1.50 1.50 0.15 0.66 1.20 - 1.18 0.45 0.45
Market Value Mar 31, 2023 1.48 1.48 0.32 0.70 1.19 - 1.20 - -
Bloomberg U.S. Aggregate Bond Index Mar 31, 2023 1.51 1.51 0.24 -0.51 1.21 0.99 1.00 - -

Inception date: Apr 13, 2016. Source: State Street Global Advisors, as of March 31, 2023.
Past performance is not a reliable indicator of future performance. Investment return and principal value will fluctuate, so you may have a gain or loss when shares are sold. Current performance may be higher or lower than that quotes. Performance of an index is not illustrative of any particular investment. All results are historical and assume the reinvestment of dividends and capital gains. It is not possible to invest directly in an index. Performance returns for periods of less than one year are not annualized. Performance is shown net of fees. Index returns are unmanaged and do not reflect the deduction of any fees or expenses. Index returns relfect all items of income, gain and loss and the reinvestment of dividends and other income as applicable. The market price used to calculate the Market Value return is the midpoint between the highest bid and the lowest offer on the exchange on which the shares of the Fund are listed for trading, as of the time that the Fund's NAV is calculated. If you trade your shares at another time, your return may differ.


Fourth Quarter Fund Positioning

  • The duration of the fund increased by 0.08 years to finish the quarter at 1.20 years.
  • The U.S. Treasury allocation increased by 6.0%.
  • The CLO allocation increased by 1.0%.
  • The agency MBS allocation decreased by 3.0%.
  • The non-agency MBS allocation decreased by 2.0%.
  • The commercial MBS allocation decreased by 0.5%.
  • The bank loan allocation decreased by 0.5%.
  • The asset-backed securitiy allocation decreased by 0.5%.
  • The emerging market debt allocation decreased by 0.5%.

Asset Allocation:

Security Description

Weight (%)



Collateralized Loan Obligations


Non-Agency Mortgage-Backed Securities


Investment Grade Corporates


Commercial Mortgage-Backed Securities


Agency Mortgage-Backed Securities


Bank Loans


Asset-Backed Securities


Emerging Markets






Source: DoubleLine, State Street Global Advisors. Allocations are as of March 31, 2023 and are subject to change without notice. Asset allocation is a method of diversification that positions assets among major investment categories. Asset allocation may be used in an effort to manage risk and enhance returns. It does not, however, guarantee a profit or protect against loss.

Fund Positioning and Outlook

With decades high inflation in decline and US economic indicators showing increased signs of deterioration, we remain constructive on duration, particularly at the long end of the US Treasury curve. We favor high quality assets in this environment and continue to use paydowns to systematically upgrade the quality of the portfolio’s credit holdings. While corporate defaults have remained below historical averages, downgrade and default activity has picked up in recent months and we see this trend continuing throughout this year with corporate earnings likely to be pressured by slower growth and margin compression. We favor structured credit over corporate credit as we believe it offers more attractive spread levels while benefitting from structural protections such as credit enhancement.

More On Fixed Income