By Todd Rosenbluth, Director of ETF & Mutual Fund Research – S&P Global Market Intelligence
State Street Global Advisors (SSGA) is the third largest ETF provider with $436 billion in assets according to Factset, aided by $2.1 billion of new assets in April. Jim Ross is an Executive Vice President of State Street Global Advisors and is Chairman of the Global SPDR business and SSGA Funds Management. Ross is responsible for advancing SSGA’s long-term ETF strategy and innovation.
Year to date through April, SPDR Gold (GLD) and SPDR Barclays High Yield (JNK) gathered $6.2 billion and $2.6 billion in new money, making them among the ten most popular ETFs in the industry in 2016. Meanwhile, with $2.4 billion and $785 million in assets, SPDR DoubleLine Total Return (TOTL) and SPDR S&P North American Natural Resources (NANR) had the most assets among ETFs launched in 2015. In addition, the firm has a broad suite of sector and industry ETFs such as Financial Select Sector PDR (XLF) and SPDR S&P Bank (KBE). S&P Global Market Intelligence has research reports on these and other SSGA ETFs available on this platform.
Below is the interview S&P Global Market Intelligence interview.
Q: Sector investing using ETFs has also remained popular. Your firm was a pioneer with the Select Sector SPDRs. How do you position them amid increased competition?
A: We look at sectors and industry ETFs holistically and dating back to 1998 they are the longest standing family of products. They are tied to well-constructed S&P indices and there is breadth of coverage. We try to provide our clients with the tools to build portfolios and use them ourselves with our sector rotation strategies. They are used in a variety of ways across different client profiles, both retail and institutional, which is why we tend to see more volatility in our flows. Sector SPDRs and industry ETFs like XLF are also liquidity driven products and are used by some short-term tactical investors.
Q: Real Estate is being elevated to its own GICS sector for the S&P 500 index, out of financials, later in 2016. SSGA recently launched new ETFs to provide investors with access to the two sectors. What impact do you think the change will have for sector investors?
A: It will give investors the opportunity to evaluate how they want to get exposure to the financials sector. If they want to follow the GICS change they will have ability to do so through the Sector SPDRs family. This was an important flexibility we wanted to provide our clients. We are very engaged with our clients and the board of directors of Sector SPDRs to make sure we can support a change in the market place being driven by indices.
[related_stories]We have a history of dealing with index changes like this where some countries will move into or out of emerging or developed markets. At SSGA, we have a talented team that deals with index tracking of global benchmarks and we look forward to displaying the Real Estate change to our clients.
Q: Relative to your peers, SSGA has a number of sub-advisory relationships to support ETFs. Why have you formed them?