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Get Five Bond Funds In One With This New ETF

June 3, 2016 2:46 pm
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The ETF of ETFs approach continues gaining popularity as another such exchange traded fund joined that mix Thursday with the debut of the SPDR Dorsey Wright Fixed Income Allocation ETF (NASDAQ: DWFI).

The SPDR Dorsey Wright Fixed Income Allocation ETF is the first ETF from State Street Global Advisors (SSgA), the third-largest U.S. ETF issuer, to trade on the Nasdaq. DWFI follows the Dorsey Wright Fixed Income Allocation Index, which “is designed to provide targeted exposure to the SPDR fixed income ETFs that offer the greatest potential to outperform the other SPDR fixed income ETFs included in the Index selection universe. Dorsey, Wright & Associates’ proprietary Index methodology ranks each SPDR fixed income ETF by relative strength and selects the four top-ranked SPDR ETFs for an initial equal weighted inclusion,” according to a statement.

DWFI holds five other SSgA fixed income ETFs, including the SPDR Wells Fargo Preferred Stock ETF (NYSE: PSK). PSK is DWFI's largest holding at a weight of 25.2 percent. DWFI's second-largest holding is an allocation of almost 25 percent to the SPDR Nuveen Barclays Municipal Bond ETF (NYSE: TFI).

DWFI also holds the SPDR Barclays Emerging Markets Local Bond ETF (NYSE: EBND), SPDR Barclays International Treasury Bond ETF (NYSE: BWX) and the SPDR Barclays Intermediate Term Corporate Bond ETF (NYSE: ITR).

DWFI's selection universe can include US and non-US developed and emerging market bonds, treasury bonds, corporate bonds, high yield bonds, inflation-protected bonds, floating rate notes, first lien senior secured floating rate bank loans, US nonconvertible preferred stock and other preferred securities, US municipal bonds and US convertible securities, according to SSgA.

The new ETF charges 0.6 percent a year, or $60 per $10,000 invested.

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