FLOT vs SPSB

FLOT—iShares Floating Rate Bond ETF

SPSBAState Street SPDR Portfolio Short Term Corporate Bond ETF

In short

FLOT The oddball in the short-corporate aisle: FLOT owns bonds whose coupons reset with short-term rates, so interest-rate sensitivity stays near zero while the credit stays investment grade. Running since 2011.

SPSB The short end of the corporate bond market, bought wholesale: roughly 1,600 investment-grade corporate bonds maturing in one to three years, for four basis points. Built as a cash-adjacent building block, not a yield swing.

Stated mandate

FLOT The fund seeks to track an index of U.S. dollar-denominated, investment-grade floating-rate bonds, offering exposure to corporate debt while seeking to reduce interest-rate risk and generate income.

SPSB The fund seeks to track the price and yield performance of the Bloomberg U.S. 1-3 Year Corporate Bond Index before fees and expenses.

Why people hold it

• FLOT Coupons reset periodically instead of sitting fixed, which keeps interest-rate sensitivity very low. Rate swings move it far less than fixed-coupon bond funds.ishares.com
• Investment-grade paper only, with maturities from one month to five years, spread across about 600 holdings. No junk, no long bonds.ishares.com
• Pays monthly, trades actively, and has tracked its Bloomberg floating-rate note index closely. A multi-billion-dollar fund with a record going back to 2011.

• SPSB Costs 0.04% a year against a 0.19% median for investment-grade corporate bond funds. At the short end, where yields are thin, that gap is a real slice of what you keep.
• Nothing in the index matures past three years, so rate moves push the price around less than they do at intermediate corporate funds like SPIB or VCIT.ssga.com
• Roughly 1,600 bonds, market-cap weighted, reconstituted at each month end, with a $300 million minimum issue size. Income arrives monthly.ssga.com
• Trading since 2009 and now a multi-billion-dollar fund that changes hands actively, one of the sturdier implementations in its peer group.

Worth knowing

• FLOT At 0.15% it sits right at the median for its short-corporate cohort, but fixed-coupon peers like VCSH (0.03%) and SPSB (0.04%) charge a fraction of that.
• The float cuts both ways: income follows short-term rates, so the monthly payout shrinks when those rates fall.ishares.com
• Low rate sensitivity is not credit protection. This is corporate debt, and prices can slip when credit spreads widen.

• SPSB Pure corporate credit, no Treasury ballast. Investment-grade paper still reprices when spreads widen, short maturities or not.ssga.com
• Bonds roll off fast and get replaced at whatever the market pays, so the income stream follows prevailing rates in both directions.ssga.com
• The manager samples the index rather than buying every bond in it, so the portfolio can drift modestly from the benchmark.sec.gov

Full FLOT profile⁠

Full SPSB profile⁠