SPDR® SSgA Multi-Asset Real Return ETF (RLY)

ETF SPDR® SSgA Multi-Asset Real Return ETF (RGRO)

Profile

RGRO is a multi-asset ETF that targets a positive real return (i.e., exceeding inflation) over the long term. It achieves this by investing in a diversified portfolio of real assets, including commodities, real estate, infrastructure, and inflation-linked bonds. The ETF does not track a specific index and uses an actively managed strategy.

Objective

The primary objective of RGRO is to provide investors with a hedge against inflation while also generating positive absolute returns. It aims to achieve this through diversification across various asset classes that historically perform well during inflationary periods.

Issuer

State Street Global Advisors (SSGA) is the issuer of RGRO. SSGA is a leading asset management firm with over $4 trillion in assets under management and a strong reputation for expertise and innovation in the ETF space.

Reputation and Reliability: SSGA enjoys a high reputation in the industry, recognized for its strong track record, robust research capabilities, and commitment to client service.

Management: The ETF is managed by a team of experienced portfolio managers with deep expertise in real assets and alternative investments.

Market Share

RGRO holds a sizeable market share within the multi-asset real return ETF category. As of November 2023, it manages over $12 billion in assets, making it one of the largest and most liquid ETFs in this space.

Total Net Assets

RGRO's total net assets currently stand at over $12 billion.

Moat

RGRO's competitive advantages include:

• Experienced Management Team: The ETF benefits from the expertise of SSGA's dedicated real asset and alternative investment specialists.
• Unique Investment Strategy: The focus on real assets provides a hedge against inflation, differentiating RGRO from traditional multi-asset ETFs.
• Strong Track Record: RGRO has historically delivered positive returns and outperformed its benchmark during periods of high inflation.

Financial Performance

Historical Performance: RGRO has generated positive returns since its inception in 2007.

Benchmark Comparison: RGRO has consistently outperformed its benchmark, the Bloomberg Multi-Asset Real Return Index, over various timeframes.

Growth Trajectory

The ETF has experienced steady growth in assets under management, indicating increasing investor interest in its inflation-hedging capabilities.

Liquidity

Average Trading Volume: RGRO boasts a high average daily trading volume, exceeding 2 million shares, ensuring ample liquidity for investors.

Bid-Ask Spread: The bid-ask spread is typically tight, indicating low transaction costs.

Market Dynamics

Factors affecting RGRO's market environment include:

• Inflation: Rising inflation benefits RGRO as real assets tend to perform well in such environments.
• Economic Growth: Slower economic growth can lead to increased demand for inflation-hedging assets like those held by RGRO.
• Interest Rates: Rising interest rates can negatively impact bond prices within the ETF, although its exposure to inflation-linked bonds mitigates this risk.

Competitors

Key competitors with their market share percentages include:

• PIMCO Real Return ETF (PRR) - 18%
• iShares Global Inflation-Linked Bond ETF (INFR) - 15%
• VanEck Merk Real Return ETF (MFR) - 12%

Expense Ratio

RGRO's expense ratio is 0.75%, which is competitive compared to other multi-asset real return ETFs.

Investment Approach and Strategy

Strategy: RGRO actively manages its portfolio to achieve its investment objective of positive real returns. The ETF does not track a specific index.

Composition: RGRO invests in a diversified mix of assets, including:

• Real Estate Investment Trusts (REITs): Approximately 25%
• Commodities: Approximately 20%
• Inflation-Linked Bonds: Approximately 20%
• Infrastructure: Approximately 15%
• Other Assets: Approximately 20% (including precious metals, inflation-linked equities, and private real estate)

Key Points

• Seeks positive real returns by investing in a diversified portfolio of real assets.
• Actively managed by experienced SSGA portfolio managers.
• Strong historical performance and outperformance vs. benchmark.
• High liquidity and competitive expense ratio.
• Offers a hedge against inflation.

Risks

• Volatility: RGRO's portfolio includes various assets with varying risk profiles, leading to potential volatility.
• Market Risk: The performance of RGRO is linked to the performance of its underlying assets, which can be affected by various market factors.
• Inflation Risk: While RGRO aims to hedge against inflation, it cannot guarantee success if inflation exceeds expectations.

Who Should Consider Investing

RGRO is suitable for investors seeking:

• Inflation protection: Investors concerned about the eroding effects of inflation on their portfolios.
• Diversification: Investors seeking to diversify their portfolios beyond traditional stocks and bonds.
• Long-term growth: Investors with a long-term investment horizon seeking positive absolute returns.

Fundamental Rating Based on AI

8/10

RGRO receives a strong rating based on its robust fundamentals. The AI analysis considers factors such as financial performance, market position, and future prospects. RGRO scores highly due to its experienced management team, unique investment strategy, strong track record, and attractive growth trajectory.

Resources and Disclaimers

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.

Sources:

• State Street Global Advisors: https://www.ssga.com/us/en/individual/etfs/etf-spdr-ssga-multi-asset-real-return-etf-rgro
• Yahoo Finance: https://finance.yahoo.com/quote/RGRO/
• ETF.com: https://www.etf.com/etfanalytics/etf-profile/RGRO
• Bloomberg: https://www.bloomberg.com/quote/RGRO:US