Ray Dalio's 'all weather' strategy makes ETF debut

Bridgewater Associates founder Ray Dalio’s famous “All Weather” strategy has arrived in the exchange-traded fund market, just as the kind of macro-driven turmoil it seeks to guard against sweeps global assets.

The SPDR Bridgewater All Weather ETF begins trading on Thursday under the ticker ALLW, according to a press release. The fund, which charges 0.85% annually, will be managed by State Street Global Advisors and sub-advised by Bridgewater, which will provide a daily model portfolio for the ETF.

All Weather is arguably the most well-known example of risk parity, an investment approach that allocates to different assets based on their levels of volatility. Rather than pile predominantly into a riskier asset class like stocks to get big returns, the idea is to achieve similar results with a more diversified, safer portfolio, often combined with leverage.

Bridgewater’s iteration emphasizes holding a balance of assets that will weather the ups and downs of a business cycle, and it seems an opportune time to be making such a pitch. Volatility has gripped global markets as US President Donald Trump slaps tariffs on the country’s trading partners, American economic data starts to weaken, and investors recalibrate expectations for Europe.

In a white paper this month, Bridgewater wrote that 15 years of extraordinary US stock performance has left investors with near-record levels of concentration and lofty valuations, while increasingly high earnings expectations are baked in. Against that backdrop, ALLW will invest across international and US equities, nominal and inflation-linked bonds and commodities.

“No matter how much you may have benefited from the recent extraordinary equity run, moving into diversifying holdings can cushion you if and when stocks experience a drawdown,” the Bridgewater paper said.

An S&P risk-parity index that targets 12% volatility is up 4.5% so far in 2025, handily outperforming a gain of 2.2% for a Bloomberg index that puts 60% in stocks and 40% in bonds. The S&P 500, meanwhile, is in negative territory.

Risk parity hasn’t always delivered, however. While the exact approach varies widely between firms, the strategy is generally seen to have disappointed during the Covid shock and in the years after. Investors, including major pension funds, have reduced their allocations to such funds.

Still, ALLW is also set to tap growing demand in the $10.5 trillion US ETF arena for more sophisticated investment options. The launch comes shortly after that of the SPDR SSGA Apollo IG Public & Private Credit ETF (PRIV), a private credit offering created by State Street and Apollo Global Management Inc. 

The latter’s name will be dropped from that fund after concerns were raised by the US Securities and Exchange Commission, but ALLW looks set to re-establish State Street’s strategy of partnering with major players who don’t already have an ETF presence of their own. 

Bridgewater’s Co-Chief Investment Officer Karen Karniol-Tambour and Christopher Ward are responsible for creating the model portfolio for ALLW, while a team led by State Street’s James Kramer will handle day-to-day management of the fund, according to a filing.

“The partnership between Bridgewater and State Street is the latest in our evolution to provide investors with strategies designed to build resiliency and diversification in a constantly changing world,” said Bob Prince, co-CIO at Bridgewater.