A strong management team and sound investment process underpin SPDR® SSgA Multi-Asset Real Return ETF's Morningstar Medalist Rating of Silver. The portfolio maintains a sizable cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The longest-tenured portfolio manager's extensive experience drives the strategy's Above Average People Pillar rating. The strategy's investment approach stands out and earns an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a considerable overweight position in the Australasia region and the basic materials sector compared with category peers. The strategy's parent organization earns the firm an Above Average Parent Pillar rating, and this rating is inherited from vehicles belonging to the same branding entity and is indirectly assigned by an analyst.

Analyst Rating

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Morningstar's evaluation of this fund's process seeks to understand management's investment philosophy, and whether it has been applied consistently over time and can add value across the market cycle. SPDR® SSgA Multi-Asset Real Return ETF earns an Above Average Process Pillar rating. The leading factor in the rating is the parent firm's five-year risk-adjusted success ratio of 58%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median Morningstar Risk-Adjusted Return for the period. Respectable risk-adjusted performance also supports the process. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. Lastly, the process is limited by the parent firm's five-year retention rate of 74%, which suggests it could do more to hold onto its portfolio managers.

 Its equity sleeve has demonstrated a consistent bias to both smaller market-cap and value-oriented companies versus category peers. The strategy has three region or sector biases compared to category peers. The most noteworthy bias is a consistent overweight in the Australasia region. It also routinely positions more assets in the basic materials sector. And finally, in the fund's most recent portfolio, less assets were allocated to developed markets regions. Although, this bias has not existed over time. 

 The portfolio is overweight in energy and basic materials relative to the category average by 25.8 and 20.7 percentage points, respectively. The sectors with low exposure compared to category peers are technology and financial services, underweight the average by 16.6 and 13.5 percentage points of assets, respectively. The portfolio is overweight in Australasia and Latin America regions relative to the category average by 6.5 percentage points and 3.0 percentage points, respectively. The regions with low exposure compared to their category peers are Japan and Developed Asia, with Japan underweight the average by 5.7 percentage points and Developed Asia similar to the average.

 For the strategy's fixed-income sleeve, interest rate risk is relatively high compared with the typical category peer, though credit risk is lower. Specifically, the portfolio exhibits a higher average credit rating of A in contrast to the category average’s BB but has a longer average duration of 6.1 years versus the average of 4.4 years.

Above Average

Process

SPDR® SSgA Multi-Asset Real Return ETF earns an Above Average People Pillar rating. The team is backed by Robert Guiliano, the longest-tenured manager on the strategy, who provides over 25 years of listed portfolio management experience. The strategies they currently manage have an average Morningstar Rating of 2.0 stars, demonstrating disappointing risk-adjusted performance compared with category peers. Despite having a small team, the two listed managers boast 17 years of listed portfolio management experience.  

 Note: The People Pillar rating is indirectly assigned by an analyst. At least one of the managers on this fund manages a different product rated by an analyst. The analyst-assigned People Pillar rating(s) for these managers are combined with algorithmic scores for any non-covered managers on a tenure-weighted basis.

People

State Street Global Advisors is under new leadership but continues to move along the positive trajectory established by former leaders. SSGA maintains its Above Average Parent Pillar rating.
Cyrus Taraporevala, who oversaw much of SSGA’s recent transformation, retired from the CEO position in December 2022 and passed the baton to his successor, Yie-Hsin Hung. She inherited a business that’s become more disciplined with its fund lineup. Fees have come down, while product development remains focused on fixed-income and sustainability funds, and many of SSGA’s launches have echoed that intention.
The seeds that SSGA planted over the past several years have been bearing fruit. It built out a low-cost series of portfolio building-block ETFs in the U.S. bearing the “SPDR Portfolio” branding. SSGA launched these later than its industry rivals, so they aren’t as large. But they’re competitive, with solid management and low fees, which helped them consistently take in new money over the past several years.
SSGA continued to overhaul its ETF business in Europe with most of its recent fixed-income and sustainability fund launches. Many of these funds track indexes and charge relatively low fees. With operations in the U.S. and Europe standing on a firm foundation, SSGA will put more focus on its Asia-Pacific business—the smallest regional segment of its business.

Parent

SPDR SSgA Multi-Asset Real Return ETF

RLY is an actively-managed fund that attempts to hedge against inflation by investing in funds with exposure to real estate, commodities, TIPS and natural resources companies.

RLY is a small fund with exposure to commodities and infrastructure companies, plus other inflation-protected securities. The ETF lacks the diversification benefits of RPAR and is more focused on assets that perform well during periods of inflation.

RLY: More Of A Cyclical Play Than A Portfolio Diversifier

SPDR® SSgA Multi-Asset Real Return ETF is an actively managed fund of funds aiming at excess return over inflation. The RLY fund provides exposure to inflation-protected securities, real estate securities, commodities, infrastructure companies, and natural resources and commodity businesses. Performance and risk metrics since 2012 are underwhelming, but RLY has outperformed other multi-asset ETFs in the inflationary environment of the last 3 years.

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RLY: Still A Good Idea

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News for SPDR SSgA Multi-Asset Real Return ETF ETF (RLY)