ETFs and Indexing

When it comes to ETF benchmarks it may seem like one index is as good as another. But that’s certainly not the case, especially for sophisticated institutional investors.

For example, State Street Global Advisors recently switched indices in a trio of its ETFs, moving to Russell benchmarks in place of the existing Dow Jones indices. The transition affects a U.S. total market ETF, a large-cap ETF and a mid-cap ETF managed by State Street, which also changed to tickers for the funds.

The three funds will now be called SPDR Russell 3000 ETF (NYSEArca: THRK), SPDR Russell 1000 ETF (NYSEArca: ONEK) and SPDR Russell Small Cap Completeness ETF (NYSEArca: RSCO).

“The changes appear to be aimed at breathing new life into a set of broad index ETFs that have struggled to gain traction with investors,” said Morningstar ETF analyst Robert Goldsborough. “One of the existing ETFs has more than $500 million in assets, but the others have about $40 million and $100 million in them. Now, State Street’s reboot has resulted in a cohesive family of new funds tracking Russell indexes, all of which carry very competitive price tags.”

State Street also rolled out a new small-cap fund, SPDR Russell 2000 ETF (NYSEArca: TWOK), that will compete with existing ETFs tracking the same Russell index. [IWM Gets a New Rival]

“The Russell indexes are strong U.S. equity benchmarks that are backed by a transparent, rules-based methodology that is accurate and replicable,” said Jim Ross, global head of SPDR ETFs at State Street Global Advisors.