Tag Archives: state street

ETF News

State Street Loses Lead in ETFs; Moves On to Hedge Funds

Leave a comment

MarketsMuse updates that State Street Corp., which lost its lead in exchange-traded funds after being a pioneer in the business more than two decades ago, is now betting on hedge funds.

The firm is expanding hedge funds and alternative investment strategies that can be offered to individual investors, Ronald O’Hanley, who in April replaced Scott Powers as head of the $2.45 trillion State Street Global Advisors, said in an interview from Boston. The money-management unit this month named Michael Ho to a newly-created role of chief investment officer for alternatives.

Ho, who heads active emerging market stock investing for State Street Corp.’s asset-management arm, will lead the unit’s expansion into these alternatives.

Last month, State Street Global Advisors named Ho to the newly created position of chief investment officer for alternatives, confirmed Brendan Paul, a spokesman for the Boston-based bank.

State Street is seeking to expand its asset management business as its active strategies — which command higher fees — have shrunk, and passive strategies such as ETFs have lost ground to BlackRock Inc. and Vanguard Group.

ETF News

Following Slashing ETF Prices, State Street To Shutdown Three ETFs

Leave a comment

MarketMuse update profiles the the second oldest financial institution in the United States, State Street’s plans to shut down three ETFs after what has been a very difficult year for them. The shutdowns are due to what they call “limited market demand”. With more of an update, an excerpt from InvestmentNews’ Trevor Hunnicutt’s story, “State Street to close three ETFs that attracted little investor interest” from 10 March , is below. 

The announced closure of the ETFs, including one municipal-bond fund in partnership with Nuveen Investments Inc., comes five weeks after the ETF pioneer slashed prices on nearly a third of its funds and while the firm faces outflows in its flagship fund.

State Street, who manages the first-to-market “SPDR” ETFs, will shut its S&P Mortgage Finance ETF (KME), S&P Small Cap Emerging Asia Pacific ETF (GMFS) and SPDR Nuveen S&P VRDO Municipal Bond ETF (VRD), according to a statement Monday. The funds are each at least three years old, but none hold more than $6 million in assets.

State Street, whose money managing arm is also known as SSGA, has $441 billion in U.S. ETF assets, third behind BlackRock Inc.’s iShares and the Vanguard Group Inc. The firm is perhaps best known for its SPDR S&P 500 ETF (SPY), which is commonly recognized as the first ETF traded in the U.S. as well as the most widely traded. That fund has lost $26 billion to investor redemptions this year, according to Morningstar Inc. estimates. State Street, whose index-tracking fund is used widely by tactical traders and institutions along with advisers, has said those flows are cyclical.

Meanwhile, the firm also has tried to expand its lineup to more profitable mutual funds and partnerships on ETFs with Nuveen and DoubleLine Capital’s Jeffrey Gundlach to attract assets into other product lines.

For the entire article from InvestmentNews, click here.

ETF News, slider, Tech Talk

Bloomberg Couples With State Street: ETF Fixed Income Basket Tool Launch

Leave a comment

MarketsMuse update courtesy of  press release issued by Bloomberg LP

NEW YORK–(Business Wire)–Bloomberg today introduced the Bloomberg Fixed Income ETF Basket Tool in order to further automate the workflow and construction of fixed income exchange traded funds (ETFs). The new offering provides the first comprehensive solution for clients of State Street Global Advisors (SSGA) to automate the process of creating and redeeming baskets of fixed income ETFs.

“Unlike equity ETF products, fixed income ETFs are highly customized. The Bloomberg Fixed Income ETF Basket Tool helps the basketing and negotiating process by introducing efficiencies that have not existed for these products,” said Ben Macdonald, Bloomberg’s Global Head of Product. “Our solution integrates our pre-existing technology and helps SSGA’s authorized participants and market makers to gain access to the liquidity necessary to create and redeem fixed income ETFs.”

“Rapid growth in the fixed income ETF market has provided more liquidity and a cost-efficient alternative to undertaking credit risk,” said Timothy Coyne, Global Head of the ETF Capital Markets Group at State Street Global Advisors. “The Bloomberg Fixed Income ETF Basket Tool provides market participants an efficient and systematic way to access the primary market of ETFs.” Continue reading →

ETF News

Blackrock ETF Blocked By SEC; Non-Transparency is Not Good Says Regulator..Duh…

2 Comments

MarketsMuse post courtesy of extract from report by Barron’s Johanna Bennet..our Editorial team leads in with “How could anyone think that an ETF (actively-managed or passive) that doesn’t disclose the underlying components to its investors could pass muster with regulators, no less investors?

The SEC has denied requests that would have allowed non-transparent active ETFs to hit the U.S. market.

In decisions issued earlier today, the regulatory agency denied applications by Precidian Investments and Blackrock’s (BLK) Spruce ETF Trust unit seeking to launch a novel type of actively managed exchange-traded fund that would not be required to disclose its portfolio holdings on a daily basis.

Investors can read the SEC rulings for Precidian here and review the Blackrock decison here.

Active ETFs are available in the U.S. But SEC rules require the funds disclose their holdings daily, which has discouraged firms from offering active products. The proposed non-transparent ETFs would disclose holdings quarterly, as mutual funds do, and often with a 60-day lag.

Precidian and Blackrock are among several firms proposing non-transparent active ETFs, including Eaton Vance (EV), State Street (STT) and T. Rowe Price (TROW). According to ETF.com, proponents of the rule change argue that it allows fund managers to protect their investing ideas and tactics and prevents front running.

Eaton Vance and State Street did not immediately respond to requests for comment. T. Rowe said it would still pursue its own proposal.

But at the heart of the SEC’s ruling regarding Precidian is a concern that the mechanism proposed to keep the market price of such funds in line with their net asset values is insufficient. As the SEC ruling reads: Continue reading →