Solactive ETF Review: Not All ETFs Are Equal
We live in extraordinary times, some would even say revolutionary.
AI is transforming our daily lives, President Trump is redefining what a president can and cannot do, and the financial industry seems to be creating more ETFs than single-listed stocks!
OK, that last one is an exaggeration, but not by much.
There are many ETFs we could call “too innovative,” but one stands out:
Solactive Global Multi-Asset ETF Portfolio 5% VT FX Hedged ETF.
To be clear, credit where it’s due — the good people at Solactive only define the index composition. Other issuers then license that index to create ETFs, effectively “franchising” the investment idea. Innovative, indeed.
This structure allows each issuer to sell investors the same index-based thesis while charging different fees. Efficient? Yes. Investor-friendly? Not necessarily.
Let’s look under the hood.
| Holding | Ticker | Country | Currency | Weight (%) |
| USD Cash | USD-CASH | US | USD | 39,54 |
| SPDR Gold Shares | GLD | US | USD | 12,35 |
| SPDR S&P 500 ETF | SPY | US | USD | 12,09 |
| Invesco QQQ Trust Series 1 | QQQ | US | USD | 12,09 |
| iShares 20+ Year Treasury Bond ETF | TLT | US | USD | 11,98 |
| iShares STOXX Europe 600 UCITS ETF | SXXPIEX | DE | EUR | 11,96 |
Observation #1 — Cash is King, but Not for You
Nearly 40% of the Solactive Global Multi-Asset ETF Portfolio 5% VT FX Hedged ETF sits in cash.
While that reduces volatility, it also means a large portion of the fund earns no return for investors.
Issuers, however, can earn around 4% interest on that cash, translating to an opportunity cost of about 1.6% annually for investors.
Observation #2 — Layered Fees, Simplified Work
This ETF is constructed from other ETFs, including the SPDR S&P 500 ETF (SPY), Invesco QQQ Trust (QQQ), and iShares 20+ Year Treasury Bond ETF (TLT).
That means investors are paying multiple layers of fees.
If the Solactive ETF were to hold its underlying securities directly, investors could save 0.12–0.15% per year. However, convenience ultimately prevails – for the issuer, not the investor.
Observation #3 — The Divine Revelation
Here’s the real insight: investors could replicate this allocation themselves.
- 40% Short-Term Treasuries
- 50% Global Equities (ETF basket)
- 10% Long-Term US Treasuries
Such a self-built portfolio would match the volatility target of 5%, yet outperform by roughly 2% annually.
Given that the Solactive index itself returns approximately 5%, investors are effectively forgoing 40% of potential returns for convenience.
Key Takeaway
The Solactive Global Multi-Asset ETF Portfolio 5% VT FX Hedged ETF is clever in structure but offers little incremental value for investors who can build similar portfolios themselves.
Sometimes, complexity disguises simplicity. Many investors choose such products because of investor psychology — assuming “sophisticated” means “better.” But in this case, it doesn’t.
Innovation in finance is valuable, but too much innovation can simply repackage the obvious – with higher fees attached.
If you’re exploring smarter and simpler ETF options, check out What ETFs to Invest In for clear, research-backed insights on building a balanced portfolio.