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State Street Global Advisors is partnering with Bridgewater Associates, the hedge fund founded by Ray Dalio, to launch an ETF that would bring the firm’s institutional investment strategies to retail investors, according to a Securities and Exchange Commission filing on Tuesday, Nov. 19.
The SPDR Bridgewater All Weather ETF would implement Bridgewater’s approach to strategic asset allocation, aiming to generate consistent returns across different economic environments through a diversified portfolio of stocks, bonds, commodities and other assets, according to the filing.
The move expands State Street’s alternatives lineup, following its September filing for a private credit ETF in collaboration with Apollo Global Management, which aims to offer retail investors access to private credit markets.
Bridgewater’s All Weather strategy, developed under Dalio’s leadership, attempts to create a portfolio balanced against different economic scenarios by investing in assets that perform well in varying growth and inflation environments, according to the filing.
The strategy, according to Bridgewater’s research, is designed to maintain balance across four key economic environments: rising growth, falling growth, rising inflation, and falling inflation.
This approach aims to create what Bridgewater calls “environmental balance” by allocating assets that tend to perform well in each scenario, such as equities and commodities for rising growth periods and government bonds for falling growth periods.
Growing Retail Access
“Bridgewater is known for its 40-year history of delivering resilient, diversified portfolios and insights to many sophisticated institutional global investors,” Anna Paglia, chief business officer at State Street Global Advisors, said in a press release announcing the partnership.
The fund would invest in U.S. and international equities, fixed income securities, commodities, and inflation-protected bonds, using derivatives to implement its strategy, the filing stated. The portfolio typically targets an annualized volatility level between 10% to 12%.
Karen Karniol-Tambour, Bridgewater’s co-chief investment officer, emphasized the timing of the launch in the press release, noting that “investors have been rewarded through traditional approaches to asset allocation” in recent decades, but “going forward, a wide range of economic environments could materialize.”
The partnership comes amid growing institutional interest in alternatives, with 45% of institutional investors globally planning to increase allocations to alternative investments in the next 12 months, according to data cited in the press release.
State Street, which launched the world’s first ETF in 1993, manages 137 funds with $1.5 trillion in assets. Bridgewater Associates, founded by Dalio in 1975 and now one of the world’s largest hedge funds, has traditionally served institutional clients.
The filing did not specify an expense ratio or ticker symbol for the proposed ETF.
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