Will This All-Weather ETF Live Up to Its Name?

With many exchange-traded funds, it's easy to predict how they'll perform. If you have an S&P 500 index ETF, for instance, all you have to do is look at the S&P's closing value to get a sense of how your fund did. Even if you own a less transparent ETF like a sector-tracking fund, you might be able to get a solid sense of your performance on any given day by looking at representative stocks in that sector to see how they did.

But for ETF investors looking for a single fund that can withstand any market environment, it's not always easy to see what's going on in real time. For instance, the State Street Bridgewater All Weather ETF (NASDAQ: ALLW) invests in multiple assets, including stocks, bonds, and commodities such as gold. As you learned in the first article of this three-part series for the Voyager Portfolio, the Bridgewater strategy has historically helped to balance changing conditions for economic growth and inflationary pressures. With the fund being just a year old, it's too early to know for sure how it will perform in the long run, but we're already getting some hints about what to expect.

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A solid start in 2025

State Street Bridgewater All Weather ETF posted good numbers last year. Total returns between its inception date of March 5 and the end of the year amounted to 15.1%. That lagged the global stock index the fund tracks by nearly five percentage points, but the ETF's bond exposure explains much of the shortfall.

In its fourth-quarter commentary , the ETF's managers discussed the factors that helped the All Weather ETF produce gains of 3.6% over the final three months of 2025. Commodities played a key role, as gold prices soared above $4,500 per ounce by year-end. Stocks also contributed to performance, as excitement about capital expenditures on artificial intelligence rippled outward from the technology sector to encompass a broader swath of the global economy.

On the bond front, though, worries about high debt issuance from both sovereign governments and corporate issuers weighed on returns. Moreover, with central banks in Europe, Japan, and the U.K. seeking to tighten their monetary policies to fight persistent inflationary pressures, bond prices didn't rise, and investors began to doubt whether the Federal Reserve would be particularly accommodating in 2026.

Turbulence in 2026

This year, though, things have been less favorable for the markets in general. The All Weather ETF has done a good job, though, posting a modest gain of just under 2% year to date even as major market indexes have been falling. The return is particularly notable given the pressure that parts of the bond market have seen, and even gold has lost some of its luster after briefly popping above the $5,000 mark early in the year.

For some, the fact that the All Weather ETF has fallen nearly 6% in March might raise questions about whether the fund can achieve its objective. Remember, though, that in market environments with just about every asset class experiencing declines, nearly every strategy will face challenges. That's been a big part of the All Weather ETF's recent experience, particularly because inflation-indexed bonds have followed stocks lower this month.

Can State Street Bridgewater All Weather ETF carry its weight?

Perhaps the toughest thing to understand about the State Street Bridgewater All Weather ETF is that the fund isn't necessarily looking to outperform the stock market every year. Instead, its goal is to make portfolios more resilient in the face of geopolitical and macroeconomic challenges. As such, investors who are willing to give up some absolute return in exchange for a smoother ride might prefer the All Weather ETF to traditional index funds. The third and final article in this series on the All Weather ETF will look more at these philosophical points and how they might influence a decision to invest in the fund.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.