State Street Global Advisors, which launched the first U.S.-listed ETF more than 30 years ago, continues to innovate. Today it expanded its lineup to include a global multi-asset allocation ETF. Preeminent hedge fund Bridgewater Associates actively managing the fund makes it special. The SPDR Bridgewater All Weather ETF (ALLW) provides access to two strong asset management brands in a liquid, accessible ETFs wrapper.
Executives from Bridgewater Associates and State Street Global Advisors will be joining me on stage at the Exchange conference on March 24. The discussion will include a look at the macroeconomic landscape, detail portfolio resilience, and shine a spotlight on the All Weather approach to investing.
The 'All Weather' Approach
According to ALLW’s prospectus, Bridgewater believes asset classes have different structural sensitivities to economic conditions that can be logically understood because they are rooted in the characteristics of the asset’s cash flows. This understanding can be used to structure a diversified portfolio to what Bridgewater believes are the most important fundamental macro drivers of asset returns: growth and inflation.
Let’s offer some examples. For instance, allocating to assets that Bridgewater believes will likely outperform in rising growth (e.g., equities and commodities) alongside assets it believes will likely outperform in falling growth (e.g., fixed-rate and inflation-linked bonds) can create a portfolio that collects the market risk premium with no fundamental sensitivity to growth conditions.
Similarly, allocating to assets that Bridgewater believes will likely outperform in rising inflation (e.g., commodities and inflation-linked bonds) alongside assets it believes will likely outperform in low or stable inflation (e.g., fixed-rate government debt and equities) can create a portfolio that collects the market risk premium with no fundamental sensitivity to inflation.
Bringing Expertise to ETF Investors
“For more than three decades, ETFs have eliminated barriers to entry across a range of asset classes and strategies,” said Anna Paglia, chief business officer at State Street Global Advisors. “Our launch of ALLW is a testament to our commitment to leveling the playing field for all investors to reach their financial goals and ‘all weather’ diversification is one way we’re helping them get there.
State Street Global Advisors has a long history of partnering with other asset managers. The firm has long offered the SPDR DoubleLine Total Return ETF (TOTL ) and the SPDR Blackstone Senior Loan ETF (SRLN ). Last week, the firm launched the SPDR SSGA Apollo IG Public & Private Credit ETF (PRIV).
ALLW has an expense ratio of 0.85%, a premium fee that we think many will still find appealing. Getting access to a hedge fund like Bridgewater Associates is hard to come by, especially for advisors and their clients.
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