How to add the SPDR® Bridgewater® All Weather® ETF to your portfolio to enhance resilience
Improve portfolio durability with a diversified, capital-efficient multi-asset strategy designed to weather changing market conditions.
In today's challenging economic environment, you need strategies that can enhance portfolio resilience and improve risk-adjusted outcomes. As a capital efficient, diversified, multi-asset allocation strategy designed to compound capital through various types of economic weather, the SPDR® Bridgewater® All Weather® ETF (ALLW) offers a potential solution.
Designed to harness the returns from holding assets, while diversifying risk away from shifting macroeconomic environments, ALLW’s portfolio of equities, nominal government bonds, inflation-linked bonds, broad commodities, and gold is diversified across major developed and emerging market economies through the use of physical exposures and derivatives.
Therefore, adding ALLW to a portfolio can boost diversification and resilience, without dramatically altering a portfolio’s current strategic weights to stocks and bonds.
Where should you source an ALLW position from?
Through capital efficient portfolio construction techniques, ALLW’s total notional exposure to assets is roughly 180% (Figure 1). As a result, adding ALLW to stock/bond portfolios can extend asset allocation reach and add exposure to some new asset classes.
Figure 1: ALLW notional exposure
| Global nominal bonds | 72% |
| Australia | 9% |
| Europe | 18% |
| United Kingdom | 7% |
| United States | 38% |
| Global equities | 43% |
| Eurozone | 10% |
| United Kingdom | 4% |
| US large cap | 14% |
| Australia | 4% |
| Japan | 5% |
| Emerging markets | 4% |
| China | 3% |
| Commodities | 37% |
| Gold | 13% |
| Broad commodities | 24% |
| Inflation-linked bonds | 33% |
| US inflation-linked bonds | 33% |
| Total ALLW exposure | 184% |
Source: State Street Investment Management, as of August 20, 2025. Characteristics are as of the date indicated and are subject to change. Numbers are rounded and may not sum to totals.
ALLW aims to generate equity-like returns with more stability over time. And, since that profile shares both equity and bond return properties, you can fund ALLW from both asset classes with differing outcomes. Funding ALLW from lower-risk asset classes like bonds may enhance portfolio returns. And funding ALLW from higher-risk asset classes like equities may help reduce total portfolio volatility without sacrificing returns.
To address multiple outcomes without significantly impacting strategic stock and bond allocations, let’s consider how to add ALLW to a 60/40 portfolio consistent with typical investor allocations.1
The 60/40 portfolio is growth-biased, concentrated in both US equities and US fixed income, with no exposure to falling growth- and/or rising inflation-biased real asset classes such as inflation-linked bonds, commodities, and gold. What’s more, its bond exposure has implicit equity/growth risk given the credit allocation—which increases its growth-centric dynamic.
Figure 2: Base 60/40 portfolio allocation mix
| Allocation | |
| Equities | 60% |
| US | 36% |
| Non-US | 24% |
| Fixed income | 40% |
| US nominal bonds | 13% |
| US credit | 24% |
| Non-US | 3% |
| Total | 100% |
Source: State Street Investment Management, as of August 20, 2025. Characteristics are as of the date indicated and are subject to change. Numbers are rounded and may not sum to totals.
Because ALLW is an actively managed daily transparent ETF, we know all of its weights. That makes it easy to calculate how to source an allocation to ALLW without changing the portfolio’s current stock/bond mix. To add a 10% allocation to ALLW, you’d source 4% from the portfolio’s current equity allocation and 6% from its existing bond allocation.
The net result is that while overall equity exposure stays the same, as 4% is added back, the new equity allocation has more non-US allocations. The total bond allocation slightly increases, as 7% of nominal bond exposure is added back. And the bond sleeve also has more non-US exposure.
This 10% ALLW allocation means 18.4% of assets are added, with roughly 7% of new assets allocated to real assets like commodities, gold, and inflation-linked bonds that can be natural diversifiers to stocks and bonds (Figure 3). The 10% allocation also increases the total notional exposure to 108%—all for the same level of invested capital.
Figure 3: Impact of adding a 10% allocation of ALLW to a 60/40 portfolio
| Original allocation (%) |
Original allocation with -10% |
Exposure added from 10% in ALLW |
Final notional exposure with ALLW |
|
| Global equities | 60 | 56 | 4 | 60 |
| US | 36 | 34 | 1 | 35 |
| Non-US | 24 | 22 | 3 | 25 |
| Global bonds | 40 | 34 | 7 | 41 |
| US nominal bonds | 13 | 11 | 4 | 15 |
| US credit | 24 | 20 | 0 | 20 |
| Non-US | 3 | 3 | 3 | 6 |
| Commodity | 0 | 0 | 2 | 2 |
| Gold | 0 | 0 | 1 | 1 |
| Inflation-linked bonds | 0 | 0 | 3 | 3 |
| Total | 100 | 90 | 18 | 108 |
Source: State Street Investment Management, as of August 20, 2025. Characteristics are as of the date indicated and are subject to change. Numbers are rounded and may not sum to totals.
Adding ALLW does more than increase capital efficiency
Overall, this newly built portfolio illustrates how, in a single trade, a minor 10% ALLW allocation can increase:
- Regional equity diversification. Non-US stocks now make up more of the total equity allocation, as 3% is added versus 1% added to US stocks
- Regional bond diversification. Non-US bond allocation doubles in the overall portfolio (moving from 3% to 6%) and is now 15% of the total bond allocation, up from 7%
- Asset class diversification. New asset classes added to the mix equal roughly 7%
- Economic resiliency. Added commodities, gold, and inflation-linked bonds tend to act as buffers in falling growth and/or rising inflation environments
- Sources of risk diversification. Moving away from equities to broader asset coverage reduces the maximum risk contribution from declines in any individual asset
Naturally, higher ALLW allocations increase this diversification across sources of risk, as does the overall total exposure obtained, but with the same level of capital committed. For example, in an 80% 60/40 portfolio, with 20% allocated to ALLW, every $1 dollar invested in the full portfolio provides $1.17 of total notional exposure.
ALLW: Seek resilience and balance in a single trade
While you can add ALLW to portfolios in many ways, this example helps illustrate some of the potential foundational benefits.
Shifting a small portion of your portfolio into ALLW can help you seek more balanced and resilient returns by enhancing diversification across assets, geographies, and economic environments.
Let us do the work for you
Get All Weather diversification in a single trade with SPDR® Bridgewater® All Weather® ETF (ALLW).