ETF Spotlight: Multi-Asset Real Return | Page 2 of 2 | ETF Trends

What You Should Know:

  • State Street Global Advisors sponsors the fund.
  • RLY has a 0.70% expense ratio.
  • The ETF holds 15 components and the top 10 make up 95.3% of the overall portfolio.
  • Asset class allocations include: natural resources 42.9%, real estate 22.9%, inflation-linked bonds 18.5% and commodities 15.7%.
  • The fund has a 1.69% 30-day SEC yield, and dividends are paid out quarterly.
  • RLY began trading on April 25.
  • The ETF is up 3.1% over the past month and up 4.4% over the last three months.
  • “RLY’s aim is to generate both current income and capital appreciation, striving to provide investors with a ‘real return,’ which is a rate of return above the rate of inflation over a market cycle,” according to Morningstar analyst Robert Goldsborough.
  • “RLY can make sense for smaller investors and advisors who are seeking a one-stop shop and who are not interested in managing multiple ETFs to gain protection from higher inflation and a weaker dollar,” Goldsborough added.
  • Investors will not see a noticeable impact from the inflation protection strategy as it can not provide added portfolio benefit over the course of a few months, writes Roger Nusbaum for The Street.
  • Inflation diminishes purchasing power over time, and the benefits of holding RLY would come from the long-term.

The Latest News:

  • The Bureau of Labor Statistics announced Wednesday that the inflation rate for all products was at 0% in July, reports Dylan Matthews for The Washington Post.
  • When excluding food and energy prices, the “core” inflation rate was 0.1% for the month.
  • In contrast, the inflation for the past year was 1.4% and the core inflation was 2.1%.
  • Observers are speculating that the low inflation would allow the Fed more room to implement monetary stimulus.
  • “The bigger worry is high unemployment,” said Ryan Sweet, a senior economist at Moody’s Analytics, said in a Reuters article. “Additional monetary easing is likely, but they are probably going to wait until later this year, possibly after the election (in November)”.

SPDR SSgA Multi-Asset Real Return ETF

For past stories in this series, visit our ETF Spotlight category.

Max Chen contributed to this article.