A Multi-Asset ETF Fund of Funds Cannot Promise Early Retirement
Many ETFs might have a few - usually small - holdings in other ETFs but some use ETFs exclusively to build a fund of funds.
FIRE Funds™ Wealth Builder ETF (FIRS) takes a multi-strategy and multi-asset class approach by selecting ETFs that are expected to do well in different sorts of economic climates.
FIRE splits the portfolio equally four ways between prosperity, recession, inflation and deflation. Currently, they select Vanguard Total US Equity for prosperity, SPDR Gold Shares for recession, iShares 1 to 3 year Treasury Bond ETF for inflation, and iShares Core US Aggregate Bonds for deflation. This reflects their opinions of which asset classes will do best under these economic scenarios and other investment managers could have different opinions. The allocations can change over time and they do have the ability to allocate to ETFs with short exposure.
FIRE is an acronym for “Financial Independence, Retire Early” and the FIRE range has been tagged as helping with early retirement plans, but this is purely a marketing strategy. Any ETF that performs well could help people to retire earlier than otherwise, and we do not see anything in the FIRE range that is uniquely geared towards early retirement. For instance, annuity rates are much lower for younger retirees in good health, and neither FIRE nor the ETF offers any help with finding a better annuity rate.
The FIRS cost ratio involves three moving parts. FIRE’s own fee for selecting and adjusting the allocations to other ETFs is 0.19%, though there is a 0.19% fee waiver until February 2026, which effectively means that FIRE is not getting a fee for the first fifteen months of this product. The fees on the underlying ETFs it invests in are described as “acquired fund fees and expenses” and are estimated at 0.48%, though they could clearly move around as the portfolio changes and as other providers adjust their fees. The expense ratio could be around 0.67% after the fee waiver expires.
Investors should compare FIRS with other multi-asset class ETFs and ignore the marketing hype about early retirement. For instance, SPDR, WisdomTree, and iShares all offer a range of multi-asset class ETFs, and the iShares range charge 0.25% or 0.30% which is less than the FIRE product. Where some of the largest providers run their own ETF range they can probably offer lower costs than a manager allocating to third party ETFs who has to charge two layers of fees.
