State Street Launches 3 Actively Managed Allocation ETFs

by on April 26, 2012 | ETFs Mentioned:

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)
  • SPDR Income Allocation ETF (INKM)
  • SPDR Global Allocation ETF (GAL)
This launch marks a major stride forward for the industry veteran while also showcasing the growing demand for actively managed ETFs [see also Free Report: How To Pick The Right ETF Every Time].

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 [see also Cheapskate ETFdb Portfolio]. 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.

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Disclosure: No positions at time of writing.