State Street’s (NYSE: STT) State Street Global Advisors, the second-largest U.S. ETF issuer, and asset management giant MFS Investment Management have partnered on three new actively managed exchange traded funds.
This marks the first foray in the ETF space for Boston-based MFS. At the end of last year, the firm had nearly $413 billion in assets under management and at the end of 2012, the company was the 27th-largest U.S.-based money managed and the 14th-largest mutual fund manager in the country. The company’s line of Meridian funds includes 30 mutual funds.
The ETFs included in the SSgA/MFS partnership are the SPDR MFS Systematic Core Equity ETF (NYSEArc: SYE), SPDR MFS Systematic Value ETF (NYSEArca: SYV) and the SPDR MFS Systematic Growth ETF (NYSEArca: SYG). All three charge 0.6% per year, reasonable among actively managed ETFs.
SYE is benchmarked to the S&P 500 while SYV and SYG are benchmarked to the Russell 1000 Value and Russell 1000 Growth Indices, respectively. The selection process behind the ETFs is combination of fundamental and quantitative research, courtesy of MFS.
Although some of the largest asset managers and mutual fund issuers have filed plans with regulators to roll out actively managed ETFs, in many cases, those funds have not seen the light of day. In what appears to be a growing trend, some asset managers that have previously not been directly involved in ETFs but find the industry’s exponential growth too compelling to ignore are partnering with established ETF providers.
SSgA has previously partnered with Nuveen and Blackstone on bond ETFs. On Wednesday, Emerging Global Advisors, the New York-based exchange traded funds issuer known for its lineup of emerging markets funds, teamed with Los Angeles-based asset management firm TCW to introduce three new emerging markets bond funds. [EGShares, TCW Partner on Three New ETFs]
SSgA has had some success with actively managed ETFs, namely with the SPDR Blackstone/GSO Senior Loan ETF (NYSEArca: SRLN). With $600.5 million in assets under management, SRLN is not only one of the most successful actively managed ETFs, but one of 2013’s most successful launches. [2013: A Good Year to be a New ETF]
ETF Trends editorial team contributed to this post.