The Northern Trust Credit-Scored US Corporate Bond ETF (SKOR) was launched on 11/12/2014, and is a smart beta exchange traded fund designed to offer broad exposure to the Investment Grade Corporate Bond ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $756.16 million, this makes it one of the average sized ETFs in the Investment Grade Corporate Bond ETFs. SKOR is managed by Northern Trust Etfs. SKOR, before fees and expenses, seeks to match the performance of the Northern Trust Credit-Scored US Corporate Bond Index.
The Northern Trust US Corporate Bond Quality Value Index measures the performance of a diversified universe of intermediate maturity, US - dollar denominated bonds of companies with investment grade credit quality, favourable valuations and enhanced short-term and long-term solvency.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.15%.
The fund has a 12-month trailing dividend yield of 4.78%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Cashaccounts for about 2.95% of the fund's total assets, followed by Salesforce Inc Callable Notes Fixed 4.9%-4.90%-09-15-2031 and Bank Of Nova Scotia/the Callable Bond Variable-8.63%-10-27-2082.
The top 10 holdings account for about 6.8% of total assets under management.
Performance and Risk
Year-to-date, the Northern Trust Credit-Scored US Corporate Bond ETF has lost about -0.75% so far, and it's up approximately 0.38% over the last 12 months (as of 09/15/2026). SKOR has traded between $47.24 $49.50 in this past 52-week period.
SKOR has a beta of 0.22 and standard deviation of 3.54% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 1563 holdings, it effectively diversifies company-specific risk .
Alternatives
Northern Trust Credit-Scored US Corporate Bond ETF is a reasonable option for investors seeking to outperform the Investment Grade Corporate Bond ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
State Street SPDR Portfolio Intermediate Term Corporate Bond ETF (SPIB) tracks Bloomberg Barclays Intermediate U.S. Corporate Index and the Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares (VCIT) tracks Bloomberg Barclays U.S. 5-10 Year Corporate Bond Index. State Street SPDR Portfolio Intermediate Term Corporate Bond ETF has $11.28 billion in assets, Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares has $68.76 billion. SPIB has an expense ratio of 0.04% and VCIT changes 0.03%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Investment Grade Corporate Bond ETFs
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Northern Trust Credit-Scored US Corporate Bond ETF (SKOR): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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