GET DEFENSIVE IN BONDS 2019 ETF Market Outlook - …

GET DEFENSIVE IN BONDS

2019 ETF Market Outlook

Shorten duration and move up in quality to mitigate duration induced price declines and credit risks.

The problem with today's bond market is basic bond math. As bond yields rise, bond prices fall. Given more rate hikes expected for the coming 12 months and record high duration of the Agg with yields below long-term averages, the drawdowns we have witnessed in 2018 bond markets are likely to continue. Because yields of shorter duration vehicles have risen along with broad bonds, there are more opportunities to generate income without taking on sizeable duration risks. Solid but slowing economic growth may put the credit market under pressure when interest rates rise and nonfinancial corporate sectors become loaded with record levels of debt.

Ticker FLRN SPSB BIL STOT SRLN

Fund

SPDR? Bloomberg Barclays Investment Grade Floating Rate ETF

Seeks to provide exposure to debt instruments that pay a variable coupon rate, a majority of which are based on the 3-month LIBOR, with a fixed spread.

Expense Ratio 0.15%

Why Now?

Investment grade floating rate notes may benefit from an uptick in LIBOR while mitigating duration-induced price declines as coupons adjust quarterly.

SPDR Portfolio Short Term Corporate Bond ETF

This low cost ETF seeks to offer precise, comprehensive exposure to US corporate bonds that have a maturity greater than or equal to 1 year and less than 3 years.

0.07%

SPDR Bloomberg Barclays 1?3 Month T-Bill ETF

Seeks to provide exposure to zero coupon US Treasury securities that have a remaining maturity of 1?3 months.

0.1359%

Investors interested in boosting yield without taking too much credit risk or duration-induced downside risks may be better served by a 1-3 year corporate bond exposure than a 1-5 year corporate where the compensation for the 4-5 year corporate bucket provides little pickup in yield for the extended duration.

T-Bills have historically shown more stability and less drawdowns during market downturns and less duration risks than long-term Treasuries. With rates rising, they are generating higher income than equities.

SPDR DoubleLine? Short Duration Total Return Tactical ETF

This actively managed short duration fund seeks to maximize current income with a duration target of 1 to 3 years.

Gross: 0.50% Net: 0.45%*

An active short duration strategy may be ideal to balance yield, duration and credit risks across many different bond sectors.

SPDR Blackstone / GSO Senior Loan ETF

This actively managed senior loan fund seeks to offer lower interest rate sensitivity while managing credit risks through security selection.

0.70%

Senior to fixed rate high yield in the capital structure, senior loans have historically mitigated some of the downside risks in the credit market when spreads widened, while increasing income as rates rise.

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* SSGA Funds Management, Inc. ("SSGA FM" or "Adviser") has contractually agreed to waive its management fee and/or reimburse certain expenses, until October 31, 2019, so that the net annual Fund operating expenses, before application of any fees and expenses not paid by the Adviser pursuant to the Investment Advisory Agreement, if any, are limited to 0.45% of the Fund's average daily net assets. The contractual fee waiver and/or reimbursement does not provide for the recoupment by the Adviser of any fees the Adviser previously waived. The Adviser may continue the waiver and/or reimbursement from year to year, but there is no guarantee that the Adviser will do so and after October 31, 2019, the waiver and/or reimbursement may be cancelled or modified at any time. This waiver and/or reimbursement may not be terminated prior to October 31, 2019 except with the approval of the SSGA Active Trust's Board of Trustees.

For Public Use. Important Risk Information

State Street Global Advisors One Iron Street, Boston, MA 02210. T: +1 617 664 7727.

This material is for informational purposes only and does not constitute investment advice and it should not be relied on as such. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. There is no representation or warranty as to the current accuracy of, nor liability for, decisions based on such information.

The views expressed in this material are the views of SPDR ETFs and SSGA Funds Research Team through the period ended November 30, 2018 and are subject to change based on market and other conditions and do not necessarily represent the views of State Street Global Advisors or any of its affiliates. This document contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. The information provided does not constitute investment advice and it should not be relied on as such.

Actively managed funds do not seek to replicate the performance of a specified index. An actively managed fund may underperform its benchmark. An investment in the fund is not appropriate for all investors and is not intended to be a complete investment program.Investing in the fund involves risks, including the risk that investors may receive little or no return on the investment or that investors may lose part or even all of the investment.

Passively managed funds hold a range of securities that, in the aggregate, approximates the full Index in terms of key risk factors and other characteristics. This may cause the fund to experience tracking errors relative to performance of the index.

Bonds generally present less short-term risk and volatility than stocks, but contain interest rate risk (as interest rates rise, bond prices usually fall); issuer default risk; issuer credit risk; liquidity risk; and inflation risk. These effects are usually pronounced for longer-term securities. Any fixed income security sold or redeemed prior to maturity may be subject to a substantial gain or loss.

Investments in Senior Loans are subject to credit risk and general investment risk. Credit risk refers to the possibility that the borrower of a Senior Loan will be unable and/or unwilling to make timely interest payments and/or repay the principal on its obligation. Default in the payment of interest or principal on a Senior Loan will result in a reduction in the value of the Senior Loan and consequently a reduction in the value of the Portfolio's investments and a potential decrease in the net asset value ("NAV") of the Portfolio.

Securities with floating or variable interest rates may decline in value if their coupon rates do not keep pace with comparable market interest rates. Narrowly focused investments typically exhibit higher volatility and are subject to greater geographic or asset class risk. The Fund is subject to credit risk, which refers

to the possibility that the debt issuers will not be able to make principal and interest payments.

ETFs trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETFs' net asset value. Brokerage commissions and ETF expenses will reduce returns.

Frequent trading of ETFs could significantly increase commissions and other costs such that they may offset any savings from low fees or costs.

Diversification does not ensure a profit or guarantee against loss.

Non-diversified funds that focus on a relatively small number of securities tend to be more volatile than diversified funds and the market as a whole.

While the shares of ETFs are tradable on secondary markets, they may not readily trade in all market conditions and may trade at significant discounts in periods of market stress.

Intellectual Property Information: Standard & Poor's?, S&P? and SPDR? are registered trademarks of Standard & Poor's Financial Services LLC, a division of S&P Global (S&P); Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones); and these trademarks have been licensed for use by S&P Dow Jones Indices LLC (SPDJI) and sublicensed for certain purposes by State Street Corporation. State Street Corporation's financial products are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates and third party licensors and none of such parties makes any representation regarding the advisability of investing in such product(s) nor do they have any liability in relation thereto, including for any errors, omissions, or interruptions of any index.

DoubleLine? is a registered trademark of DoubleLine Capital LP.

BLOOMBERG?, a trademark and service mark of Bloomberg Finance L.P. and its affiliates, and BARCLAYS?, a trademark and service mark of Barclays Bank Plc, have each been licensed for use in connection with the listing and trading of the SPDR Bloomberg Barclays ETFs.

Distributor: State Street Global Advisors Funds Distributors, LLC, member FINRA, SIPC, an indirect wholly owned subsidiary of State Street Corporation. References to State Street may include State Street Corporation and its affiliates. State Street Global Advisors Funds Distributors, LLC is the distributor for certain registered products on behalf of the advisor. SSGA Funds Management has retained GSO Capital Partners as the sub-advisor for SRLN & DoubleLine Capital LP as the sub-advisor for STOT. GSO Capital Partners and DoubleLine Capital LP are not affiliated with State Street Global Advisors Funds Distributors, LLC.

Before investing, consider the funds' investment objectives, risks, charges and expenses. To obtain a prospectus which contains this and other information, call 1-866-787-2257 or visit . Read it carefully.

? 2019 State Street Corporation. All Rights Reserved. ID15207-2351030.1.1.AM.RTL 0119 Exp. Date: 1/31/2020

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