SKOR Hits $1 Billion AUM Milestone Amid Corporate Bond Yield Surge

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The Northern Trust Credit-Scored US Corporate Bond ETF (SKOR) has joined the billion-dollar club for assets under management.

Key Takeaways:

SKOR attracted $247 million in recent inflows, pushing its assets under management past the $1 billion threshold after more than a decade on the market.
Investment-grade corporate bond yields have climbed past 5.9% (briefly topping 6% in early October), providing investors with attractive relative income.
Despite strong yield generation, intermediate corporate bond funds faced short-term price pressure and negative returns due to higher baseline Treasury yields.

Over the last four weeks, SKOR saw inflows of $247 million, which boosted the fund to reach its billion-dollar milestone towards the end of September, after more than a decade of trading.

SKOR, which has a 0.15% expense ratio, seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Northern Trust US Corporate Bond Index.

The underlying index reflects the performance of a broad universe of U.S.-dollar-denominated investment-grade corporate bonds that can potentially deliver a higher total return than the overall investment-grade corporate bond market.

Northern Trust Corp.’s three largest ETFs are:

The Northern Trust Morningstar Global Upstream Natural Resources (GUNR) with $7 billion in AUM.
The Northern Trust STOXX Global Broad Infrastructure ETF (NFRA) with $2.97 billion in AUM.
The Northern Trust iBoxx 3-Year Target Duration TIPS ETF (TDTT) with $2.57 billion in AUM.

Corporate Bonds Offering Attractive Yields

For investors looking for steady income without venturing too far down the risk curve, investment-grade corporate bonds like SKOR are providing high relative yields compared to the sub-4% environments seen in recent years.

According to Street Stats, as of October 8, investment-grade corporate bond yields have risen from 5.29% on July 8 to 5.94%, with the increase becoming especially noticeable in September as yields advanced from 5.74% on September 16 to 6.02% on September 30.

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The yields reached 6.03% on October 5 and began easing after that. Currently, SKOR’s yield sits at 4.78% and over the past month, the fund has returned -1.32%, according to VettaFi’s ETF Database.

The slight negative return reflects modest price pressure across intermediate investment-grade corporate bonds due to higher baseline Treasury yields.

SKOR’s portfolio provides investors with exposure to a broad range of corporate issuers, including companies in technology, healthcare, and financial services.

With yields elevated, investors have an opportunity to lock in potentially attractive income by looking at corporate bond ETF’s like SKOR, but should weigh that opportunity against duration and credit risks.

For more news, information, and strategy, visit the Fixed Income Content Hub.

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