April 27, 2012
State Street Debuts Actively Managed ETFs
State Street Global Advisors last Thursday said that trading had begun on the NYSE Arca exchange on the first three of its actively managed exchange-traded funds.
The pioneer of passively managed ETFs, which it first introduced in January 1993, said it had introduced three funds of funds, that will be managed by its Investment Solutions Group.
State Street's actively managed funds will be "very focused'' and will feature "tactical" strategies that identify investing opportunities, on undervalued or mispriced securities, according to Jim Ross, president of SSgA Funds Management.
"The goal is obviously to outperform" market returns and benchmarks, he said.
State Street's first actively managed funds include:
SPDR SSgA Multi-Asset Return ETF: For capital appreciation and current income. Invests in multiple exchange-traded products, from inflation-protected securities to commodities to real estate. Annual expense ratio: 70 basis points;
SPDR SSgA Income Allocation ETF: Income and yield-generating investments, investing in exchange-traded products such as stock funds, bond funds, hybrid stock-bond funds and real estate. Annual expense ratio: 35 bps;
SPDR SSgA Global Allocation ETF: Income, capital preservation and low volatility, investing in stocks, real estate, debt and cash. Annual expense ratio: 35 bps;
State Street launched the exchange-traded fund industry in 1993 with the introduction of the SPDR &P 500 ETF, known as SPY.
Wells Fargo's Chief Talks Up Diversity, Organic Growth
The retail financial services space can do itself a favor by making a few organic improvements, according to Danny Ludeman, chief executive officer at Wells Fargo Advisors.
Ludeman, who keynoted the second day's session at the 2012 MMI Annual Convention, said the industry needs to attract more diverse workforce such as women and other ethnicities.
He also said the industry has failed to attract new affluent clients organically and is worried that firms like Charles Schwab and Fidelity have become so big that clients aren't treated with enough attention because the person bringing in a new client hands that client over to others within the firm and won't talk to that client again.
Target Date Funds Hit $429 billion
Total assets under management for target maturity funds reached a record high in the first quarter of 2012, or $429 billion, according to a report released by Morningstar.
Target maturity funds also saw the third-highest quarterly flow, of $15.8 billion, since the first target maturity fund was launched in 1994. The largest quarterly flows was fourth quarter 2007, followed by first quarter of 2011.