Boston-headquartered investment manager GMO has launched the firm’s first multi-asset class strategy offered in an ETF structure.
The offering, the GMO Dynamic Allocation ETF, applies GMO’s valuation-based asset allocation approach, which is built on the principle that asset prices can deviate from their intrinsic value but tend to revert to fair value over time.
The fund can invest broadly across stocks and bonds and is not limited by sector, market cap, credit quality or geography, shared the investment manager.
Under normal conditions, the fund is expected to hold between 40% and 80% in equities, with additional value added through active security selection within each asset class.
Fund Selectors: “Beyond price and tracking error in ETFs”
“Taxable investors can be hesitant to take advantage of new opportunities because they don’t want to sell from existing positions with embedded gains. GMOD provides a multi-asset portfolio within a single ETF that does the reallocating on investors’ behalf, allowing them to benefit from compelling opportunities as they arise, like today’s attractive deep value and international stocks, without constantly realising capital gains,” said John Thorndike, co-head of asset allocation at GMO.
