Real Potential Protection with ETF RLY

COVID-19 has swept the country, with rising interest rates and inflation now sweeping the market.

In an economy mired in uncertainty, many investors are wary of squandering their investable funds, and risky investments may seem more frightening than thrilling. However, the following exchange-traded fund (ETF) may be able to afford investors some peace of mind.

That fund is the SPDR SSGA Multi-Asset Real Return ETF (NYSE:RLY), a unique fund that takes a multifaceted approach to combating inflation. RLY combines exposure to inflation-linked bonds with real estate, commodities, Treasury Inflation-Protected Securities (TIPS) and natural resource companies.

Through a fund-of-funds (FOF) structure, RLY aims to achieve real return consisting of capital appreciation and current income. Through its unique structure, the fund manager considers real return to be a rate of return above the rate of inflation. As it is structured as a fund of funds (FOF), the ETF invests in multiple mutual funds, rather than only single stocks, which can be beneficial as it helps to spread out investment risk even more than owning one mutual fund.

RLY has an expense ratio of 0.50% and a 1.93% dividend yield. The fund has $131.08 million in assets under management and an average daily volume of $1.28 million. Though the fund fell to a low in November 2020, it has progressed steadily higher and is now at the high end of its 52-week range.

RLY’s top five holdings include Invesco Optm Yd Dvrs Cdty Stra No K1 ETF (PDBC), 25.16%; SPDR S&P Global Natural Resources ETF (GNR), 24.61%; SPDR S&P Global Infrastructure ETF (GII), 21.75%; SPDR Blmbg Barclays 1-10 Year TIPS ETF (TIPX), 8.51% and SPDR Dow Jones REIT ETF (RWR), 4.02%.

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The fund’s underlying portfolio is evenly balanced, and exposure is split fairly equally among each of the aforementioned asset classes. Though it is not an ETF that is expected to deliver sky-high gains, SPDR SSGA Multi-Asset Real Return ETF (NYSE:RLY) may be a good tool for investors who are worried about preserving their capital, as inflationary pressures are mounting. Still, investors whose interest is piqued should conduct their due diligence and decide whether or not the fund is an appropriate choice for their investment needs.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Successful Investing, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.