06 Mar State Street teams up with Ray Dalio’s Bridgewater on new ‘All Weather’ ETF
State Street has teamed up with Bridgewater Associates for an ETF that will give regular investors a chance to buy a version of one of the massive private investment firm’s longstanding strategies. The SPDR Bridgewater All Weather ETF (ALLW) launched Wednesday and is based off an investing approach of Bridgewater’s created in 1996. All Weather is an example of what is often called a risk-parity strategy, combining multiple assets in an attempt to lower the volatility of the overall portfolio. The ETF will be actively managed, with the goal of taking advantage of changes in the macroeconomic environment. ALLW will be managed directly by State Street employees, using a model portfolio developed by Bridgewater. The range of assets that the fund can hold include equities, inflation-linked bonds, nominal bonds, gold and other commodities. “The mix of assets Bridgewater uses has and will continue to evolve to best reflect the global macroeconomic research produced by their approximately 300-person investment team,” the fund’s factsheet says. The fund can gain those exposures in multiple ways, including through derivatives, which means the notional value of the positions can be larger than the fund’s assets. The exposures listed on the initial holdings list do add up to more than 100%, with nominal bonds as the biggest category. The launch comes at a time when the U.S. bull market for stocks has shown signs of strain, and the policies of President Donald Trump have created uncertainty for the global economic outlook . “The next 10 years could look very different than the past due to dynamics like geopolitical tensions, heightened inflation, deglobalization, AI, and more. Predicting exactly how this will play out will be extremely difficult, but all investors have a chance to prepare better for what’s ahead,” Karen Karniol-Tambour, co-chief investment officer at Bridgewater, said in a press release. New trend for ETFs The launch is part of a broader push by the ETF industry to put strategies previously reserved for high net worth investors in to widely available funds. Last month, State Street launched a private credit ETF as part of a partnership with Apollo. The underlying strategy of the fund is the same as Bridgewater’s decades-long approach, but there will be some differences in the portfolios, according to the fund’s website. The All Weather ETF comes with a management fee of 0.85%. “Our launch of ALLW is a testament to our commitment to leveling the playing field for all investors to reach their financial goals and ‘all weather’ diversification is one way we’re helping them get there,” Anna Paglia, chief business officer at State Street Global Advisors, said in a press release. All Weather and other risk-parity strategies are often pitched as an alternative to the traditional 60-40 portfolio of stocks and bonds, though there is no guarantee they will outperform that approach in any given year. While Bridgewater’s All Weather returns are not publicly available, risk parity strategies in general seem to have struggled in the post-Covid market environment. Bridgewater was founded by legendary hedge fund manager Ray Dalio, who has shifted to more of an adviser role for the firm in recent years. The firm has roughly $172 billion in assets under management, according to a recent securities filing .