Investors gaining confidence in the economic recovery are shoveling record amounts of cash into “balanced” mutual funds that invest in both stocks and bonds.
The huge inflows to balanced or “hybrid” funds coincide with the rise of so-called multi-asset ETFs designed to give investors exposure to a diversified portfolio with one trade and low fees.
SPDR SSgA Global Allocation ETF (NYSEArca: GAL) is an example of this trend.
The fund invests in other ETFs – most managed by State Street — to build a global diversified portfolio comprised of equities, bonds, preferred shares, TIPS and real estate. It also has a 1% allocation to PowerShares DB Gold Fund (NYSEArca: DGL). [Don’t Forget About These Multi-Asset ETFs]
GAL charges a gross expense ratio of 0.35%. The ETF has posted a total return of about 18% for the trailing year, according to Morningstar.
The fund’s top three holdings are SPDR S&P World ex-US ETF (NYSEArca: GWL) at 17%, SPDR S&P 500 ETF (NYSEArca: SPY) at 11.4% and SPDR Barclays Aggregate Bond ETF (NYSEArca: LAG) at 8%. GAL is relatively small with $50.5 million in assets. The ETF was launched in April 2012.
GAL is actively managed. The fund benchmarks its performance against the MSCI ACWI IMI Index, a free float-adjusted market capitalization-weighted index that is designed to measure the combined equity market performance of developed and emerging markets. The index covers approximately 98% of the global equity investment opportunity set.