ETF Education Report: State Street(R) Global Allocation ETF (GAL)

What this ETF is trying to do

The State Street(R) Global Allocation ETF (ticker: GAL) is an exchange-traded fund designed to spread investments across different areas. Based on its top holdings, it includes a mix of international stocks, U.S. stocks, and various types of bonds. This type of fund aims to provide exposure to many different parts of the global market at once.

What the numbers show

When looking at an ETF, it is important to understand two different types of returns: price return (how much the share price changed) and total return (which includes both price changes and cash distributions).

• Year-to-Date (YTD): The price return is approximately 6.92%, while the total return is approximately 8.71%.

• One-Year: The price return was approximately 6.99%, and the total return was approximately 10.60%.

• Three-Year: The price return was approximately 40.26%, and the total return was approximately 52.76%.

To visualize the price change, we can look at an estimated price from roughly one year ago, which was $49.42. The current price is $52.87.

Income and distribution explanation

This ETF pays out cash to investors, known as distributions. The distribution yield is approximately 3.21%. This number describes the cash paid out relative to the ETF's price. Over the last 12 months, there were 4 payouts, which usually happen every quarter.

It is important to remember that a distribution yield tells you about the cash income, but it is not the same as your total return.

NAV erosion explanation

"NAV erosion" refers to a situation where the value of the underlying assets in the fund decreases significantly over time. StockValueFinder uses an erosion-risk score to measure this risk. For GAL, the erosion score is 100, and the label indicates "No price erosion detected." There is no severe erosion-risk flag for this ETF.

Top Holdings

The following are the top holdings in this fund (note that this is a partial list):

• SPDR® Portfolio Developed Wld Ex-US ETF (16.62%)

• SPDR® Portfolio Aggregate Bond ETF (14.52%)

• SPDR® S&P 500® ETF (14.44%)

• SPDR® Portfolio Emerging Markets ETF (9.42%)

• SPDR® BLMBG 1-10 Year TIPS ETF (3.73%)

*Holdings can change over time.*

Pros

• The fund shows a history of positive total returns over one, three, and five-year periods.

• The erosion-risk measurement is rated as "good."

Cons

• Investors should remember that distributions are cash payments and do not guarantee that the share price will stay the same.

Beginner takeaway

When studying GAL, notice the difference between the share-price movement and the total return. The total return is higher because it includes the cash distributions paid to investors. Always look at both numbers to get a full picture of how an ETF has performed.