Exchange Traded Funds (ETFs)

EFT Talk: New Fund Offers Global Investment Opportunity

I was introduced to several appealing exchange-traded funds (ETFs) during a recent conference call that I want to bring to your attention starting this week. Today, I will feature the first of these funds, the SPDR SSgA Global Allocation ETF (GAL), a world allocation fund from the State Street Group. This fund has its holdings in a globally diverse selection of ETFs. That’s right; this ETF invests in other ETFs — across several different sectors. The fund’s holdings primarily are in international equity, bond, and emerging market funds — providing an interestingly diverse investment opportunity.

GAL is down slightly so far this year but so are most equities. The fund began the year at $30.08 but had slipped to $28.15 on June 6. Lately, the fund has been showing signs of recovery. As a result, now could be a good time to buy the fund if you think it may have bottomed out.

Before you do so, here is a brief description of the SPDR SSgA Global Allocation ETF (GAL). The fund seeks to provide capital appreciation by investing in ETFs registered under the Investment Company Act of 1940, which seeks to track the performance of a market index, exchange-traded commodity trusts and exchange-traded notes.

As of June 5, GAL’s top five holdings were: SPDR S&P 500 ETF (SPY), 22.90%; SPDR S&P World EX-US ETF (GWL), 15.47%; SPDR Barclays Capital High Yield Bond ETF (JNK), 11.05%; SPDR Barclays Capital Intermediate Term Corporate Bond ETF (ITR), 8.34%; and SPDR S&P Emerging Markets ETF (GGM), 7.73%.

GAL is attractive partly because of the way it seeks to create a globally diversified portfolio that includes broad coverage of subsectors across the equity, fixed income and alternative investment landscapes. The fund’s diversity provides much sought-after stability in this uncertain financial climate. In addition, the fund is low-cost, low-turnover and tax-efficient, boosting its appeal to investors.

If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my ETF Trader service. As always, I am happy to answer your questions about ETFs, so do not hesitate to email me by clicking here. You just may see your question answered in a future ETF Talk

Doug Fabian

Doug Fabian is the Editor of Weekly ETF Report, a free weekly e-newsletter, and the newsletter Successful ETF Investing. He’s also the host of the syndicated radio show, “Doug Fabian’s Wealth Strategies.” Doug also edits the fast-paced trading service ETF Trader’s Edge, for investors who want to take their profits to the next level. Taking over the reins from his dad, Dick Fabian, back in 1992, Doug has continued to uphold the reputation of the newsletter as the #1 risk-adjusted market timer as ranked by Hulbert’s Investment Digest. Doug became a member of the “SmartMoney 30” in 1999 — a listing of the most influential individuals in the mutual fund industry. In the feature, SmartMoney magazine exclaims that Doug is the best-known “trend follower” among the $56 billion (and growing) group of financial advisors. In 2001, Doug wrote “Maverick Investing,” published by McGraw-Hill. He also regularly appears at seminars around the country, stands out on the pages of the largest newspapers (The Wall Street Journal, The Los Angeles Times, and The New York Times), and speaks on national television (CNBC, Fox News, and Bloomberg Forum). For more than 35 years, Successful ETF Investing (formerly the Telephone Switch Newsletter and Successful Investing) has produced double-digit percentage annual gains. Doug has become known for his expert knowledge and timely use of innovative tools, such as exchange-traded funds, bear funds, and enhanced-index funds to profit in any market climate. For more information about Doug’s services, go to http://www.fabian.com/