State Street Global Advisors (SSgA) has made its debut in the active ETF space with the introduction of three actively managed asset-allocation ETFs that provide investors with access to the firm’s institutional asset management expertise.
SSgA has entered the active ETF space with the introduction of three actively managed asset-allocation SPDR ETFs.
The three funds, namely the SPDR SSgA Multi-Asset Real Return ETF (RLY), the SPDR SSgA Income Allocation ETF (INKM), and the SPDR SSgA Global Allocation ETF (GAL), are managed by the firm’s Investment Solutions Group (ISG) and are listed on the NYSE Arca.
“The launch of these three new actively managed SPDR ETFs opens a new chapter in our longstanding commitment to democratising access to institutional asset classes, strategies, and expertise,” said James Ross, senior managing director and global head of SPDR ETFs at State Street Global Advisors.
“In providing a convenient, cost effective vehicle for investors and financial advisers to benefit from SSgA’s experience in global tactical asset allocation, our actively managed ETFs are an innovative addition to the SPDR ETF family,” added Ross.
Designed to capture inefficiencies that occur due to temporary mis-pricings in the market, SSgA’s first actively managed SPDR ETFs feature tactical asset allocation strategies that are built on a disciplined risk-managed quantitative process that is supplemented with fundamental analysis.
Details of the three funds are as follows:
The SPDR SSgA Multi-Asset Real Return ETF (RLY) seeks to achieve a real return consisting of capital appreciation and current income by utilising a fund-of-funds structure to invest in multiple exchange traded products representing asset classes, such as inflation protected securities, real estate, commodities, and natural resources. Its annual expense ratio is 0.70%.
The SPDR SSgA Income Allocation ETF (INKM) seeks to provide exposure to income and yield-generating investments using a fund-of-funds structure that invests in multiple exchanged traded products representing asset classes, such as domestic and international equities, investment grade and high yield debt securities, hybrid equity/debt securities (preferred stock and convertible securities), and real estate. Its annual expense ratio is 0.70%.
The SPDR SSgA Global Allocation ETF (GAL) seeks to provide income, capital preservation, and low volatility using a fund-of-funds structure that invests in multiple exchange traded products and an SSgA money market fund representing asset classes, such as domestic and international equities, real estate, debt securities, and cash. Its annual expense ratio is 0.35%.
SSgA’s Investment Solutions Group, which manages more than $160 billion in assets across a wide range of tactical and strategic asset allocation portfolios, will manage the new SPDR active asset allocation ETFs. When implementing tactical asset allocation portfolios, the ISG relies on a dynamic approach to identifying risk environments and multi-factor quantitative models, with a layer of qualitative analysis by applying market insight and experience to the models.
“Our actively managed ETFs take advantage of a wide range of underlying asset classes to provide broadly diversified, global portfolios with a time tested, tactical allocation process that adds value by capturing new market opportunities,” said Dan Farley, senior managing director and chief investment officer for SSgA’s ISG. “In today’s low yield, volatile market, we look forward to helping financial advisers and investors benefit from emerging investment opportunities with this new suite of actively managed SPDR ETFs.”
State Street manages more than $307 billion in SPDR ETF assets worldwide (as of 31 March, 2011) and is the second largest ETF provider globally, after BlackRock’s iShares.