By Michael Johnston:
State Street, one of the largest ETF issuers by total assets, has thrown its hat into the active ETF ring with the launch of three multi-asset class products. The new ETFs, each of which will be structured as fund-of-funds, include:
- SPDR Multi-Asset Real Return ETF (RLY - News)
- SPDR Income Allocation ETF (INKM - News)
- SPDR Global Allocation ETF (GAL - News)
Under The Hood: RLY
RLY seeks to achieve “real return,” or a rate of return greater than the rate of inflation over a full market cycle [see Real Return ETFs]. In seeking to accomplish that objective, RLY will invest in other ETPs that cover four primary asset classes: TIPS, domestic and international real estate, commodities, publicly-traded companies operating in the commodities and natural resource businesses. This ETF comes in the middle of the cost spectrum among Hedge Fund ETFs with a 0.70% expense ratio.
Under The Hood: INKM
As the name and ticker suggests, INKM will focus on investment in income and yield generating assets. Specifically, INKM will hold positions in four primary asset classes: domestic and international stocks, investment grade and high yield corporate debt (both domestic and international), hybrid securities such as preferred stock and convertible bonds, and REITs. Similar to RLY, INKM will also charge 0.70% in expense fees.
Under The Hood: GAL
GAL will be designed to offer exposure to domestic and international debt and equity, with a weighting of approximately 60% afforded to stocks and 40% to bond assets [see Bond ETFs For Every Objective]. This ETF will appeal to investors looking to preserve capital, while also generating a meaningful current income without having to stomach excessive portfolio volatility. GAL offers active management with a relatively cheap price tag, charging only 0.35% in expense fees.
Disclosure: No positions at time of writing.
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