Daily ETF Watch: Fixed Income Fund Of Funds

SPDR issuer plans ETF that will invest in its other ETFs.

Reviewed by: Heather Bell
Edited by: Heather Bell

State Street Global Advisors has filed for an ETF that will invest in the holdings of an index from Dorsey Wright comprising other SPDR ETFs. The SPDR Dorsey Wright Fixed Income Allocation ETF will invest in the four index-based SPDR fixed-income ETFs exhibiting the greatest levels of relative strength, with an evaluation of the constituents occurring on a weekly basis.

Dorsey Wright’s relative strength methodology ranks securities based on their price momentum relative to other securities in the same universe. In this case, that universe is SSgA’s lineup of 20 passively managed SPDR fixed-income ETFs.

The index weights each of the four ETFs equally, and funds are only replaced during the weekly evaluation if their relative strength falls below a certain threshold, according to the prospectus. The index components’ weights are individually reset to 25% if a component is replaced or if the components’ weights deviate enough from their original levels.

The filing did not include a ticker or expense ratio; however, it indicated that the fund would list on the NYSE Arca.

Contact Heather Bell at [email protected].

Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.