So many exchange-traded products, so little time. With the
number of ETFs and ETNs in the U.S. fast approaching 1,500,
investors have a dizzying array of options, so it's not
surprising that some indecision may creep into the selection
For the indecisive among us, or for those that like the idea
of owning multiple ETFs under one umbrella, an ETF fund of funds
could prove to be a shrewd move. Also known as
"multi-management," the fund of funds concept allows investors to
have exposure to multiple asset classes under the tent of one
While this concept has proven desirable over time, many firms
that sponsor ETF fund of funds don't actually advertise them as
such, leaving investors to do some of the digging on their own. A
good place to start is with
asset allocation ETFs, many of which are
comprised of multiple ETFs
. With that, let's have a look at some of the more intriguing ETF
fund of funds options on the market today.
iShares Morningstar Multi-Asset Income Index Fund (NYSE:
Not even two months old, the iShares Morningstar Multi-Asset
Income Index Fund is the epitome of an ETF fund of funds. The ETF
features a small allocation to cash, but its other nine holdings
are all other iShares products.
The roster includes familiar funds such as the iShares iBoxx $
High Yield Corporate Bond Fund (NYSE:
), the iShares Barclays 20+ Year Treasury Bond ETF (NYSE:
), the iShares S&P U.S. Preferred Stock Index Fund (NYSE:
) and the iShares Dow Jones Select Dividend Index Fund (NYSE:
). That quartet represents approximately 55% of IYLD's
IYLD has risen slightly since its early April debut and has
raked in $22.8 million in assets under management. Income
investors should note this fund will pay a monthly dividend.
SPDR SSgA Income Allocation ETF (NYSE:
Another new entrant to the ETF game, the SPDR SSgA Income
Allocation ETF is one of State Street Global Advisor's new
actively managed products and it should be noted that the
actively managed space is another area where investors can find
multiple ETF fund of funds.
Just over a month old, INKM is home to 18 holdings, 17 of
which are other SPDR funds. As is the case with IYLD, the roster
is chock full of ETFs many investors are already familiar with.
The SPDR S&P Dividend ETF (NYSE:
), SPDR Barclays Capital Long CorpTerm Bond ETF (NYSE:
) and the SPDR Barclays Capital High Yield Bond ETF (NYSE:
) account for over 43% of INKM's weight.
Russell Equity ETF (NYSE:
One of the pioneers of the ETF fund of funds concept, the Russell
Equity ETF is also one of the more unique and unbiased plays in
this space. That is to say, ONEF is not loaded with other Russell
funds. ONEF is home to 10 other ETFs, but only one, the Russell
1000 Low Volatility ETF (NYSE:
), is a Russell fund. The other nine holdings are comprised of
five Vanguard and four iShares funds with the iShares Russell
1000 Index Fund (NYSE:
) commanding over 47% of ONEF's weight. The Vanguard MSCI EAFE
) receives an allocation of over 19%.
With an expense ratio of 0.51%, ONEF is cheaper than the
iShares and SPDR offerings highlighted above.
AdvisorShares Accuvest Global Opportunities ETF (NYSE:
Want an actively managed ETF fund of funds heavy on emerging
markets? There's an ETF for that and that ETF is the
AdvisorShares Accuvest Global Opportunities ETF. ACCU isn't 100%
allocated to emerging markets ETFs as the iShares S&P 500
Index Fund (NYSE:
) currently accounts for 13.5% of the fund's weight.
ACCU's other five ETF holdings are sure to conjure up mixed
emotions among emerging markets investors. The iShares FTSE China
25 Index Fund (NYSE:
) receives a weight of almost 20% and that's fine on the basis of
potential Chinese economic stimulus and on the premise that
investors will embrace Chinese stocks at some point because
they're cheap. We also like an almost 23% allocation, the ETF's
largest, to the iShares MSCI Thailand Investable Market Index
What's holding ACCU back is a combined weight in excess of 26%
to the iShares MSCI Brazil Index Fund (NYSE:
) and the iShares MSCI South Africa Index Fund (NYSE:
), two emerging markets that have been punishing investors
recently. The iShares MSCI South Korea Index Fund (NYSE:
) is ACCU's other holding.
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