Report Asserts Explosive Product Growth and Untapped Potential for
Institutional Investors
BOSTON--(BUSINESS WIRE)--
State Street Corporation (NYSE: STT), one of the world's leading
providers of financial services to institutional investors, today
released its Vision Focus report on trends in the usage of exchange
traded funds (ETFs) by institutional investors. The report notes that
while ETFs currently account for nearly USD $1 trillion in assets under
management, institutional investors often do not take full advantage of
these flexible investment tools.
"In this time of economic uncertainty, market volatility and increased
scrutiny over investment management fees, ETFs are gaining traction by
enabling investors to express a tactical view on an industry, commodity
or asset class while providing well-diversified, low-cost market
exposure," said Anthony Rochte, senior managing director at State Street
Global Advisors. "Institutions are increasingly discovering the benefits
of ETFs. However, to fully maximize their potential, continuing dialogue
with institutions and providing educational resources describing the
widening array of uses for these offerings is essential" Rochte added.
State Street's Vision Focus report provides examples of current methods
of employing ETFs by some institutional investors for optimal effect,
including cash equitization, completion and core-satellite strategies,
strategic asset allocation and tax management, among other uses. It also
highlights regional differences in the development of the ETF market and
provides a discussion of recent regulatory changes.
"While product innovation has been significant throughout the industry
over the past two decades, the rush of new products has been a source of
confusion, even for seasoned institutional investors," said James Ross,
senior managing director at State Street Global Advisors. "With a
heightened level of product development, short performance records and
fluctuating regulations for some of these product offerings, selecting
the best ETFs can be a challenge. ETFs with reasonable spreads,
sufficient liquidity, low expenses, minimal tracking error and
well-constructed underlying indices provide the best prospects for
success," according to Ross.
State Street is one of the largest providers of exchange traded funds
globally with assets under management totaling more than USD $204
billion as of December 31, 2009.
State Street's Vision Series addresses topics that are impacting the
financial services industry. Previous reports have included alternative
investments, sovereign wealth funds, Islamic finance and derivatives. To
obtain a copy of this Vision Focus report on exchange traded funds or
other State Street Vision reports please visit www.statestreet.com/vision.
About State Street Global Advisors
State Street Global Advisors, the investment management business of
State Street Corporation (NYSE: STT), delivers investment strategies and
integrated solutions to clients worldwide across every asset class,
investment approach and style. With $1.7 trillion in assets under
management at September 30, 2009, State Street Global Advisors has
investment centers in Boston, Hong Kong, London, Montreal, Munich,
Paris, Singapore, Sydney, Tokyo, Toronto and Zurich, and offices in 26
cities worldwide. For more information, visit State Street Global
Advisors at www.ssga.com.
About State Street
State Street Corporation (NYSE: STT) is one of the world's leading
providers of financial services to institutional investors including
investment servicing, investment management and investment research and
trading. With $17.9 trillion in assets under custody and administration,
and $1.7 trillion in assets under management at September 30, 2009,
State Street operates in 27 countries and more than 100 geographic
markets worldwide. For more information, visit State Street's website at www.statestreet.com.
ETFs trade like stocks, are subject to investment risk and will
fluctuate in market value.
In general, ETFs can be expected to move up or down in value with the
value of the applicable index. Although ETFs may be bought and sold on
the exchange through any brokerage account, ETFs are not individually
redeemable from the Fund. Investors may acquire ETFs and tender them for
redemption through the Fund in Creation Unit Aggregations only, please
see the prospectus for more details.
Frequent trading of ETFs could significantly increase commissions and
other costs such that they may offset any savings from low fees or costs.
CORP-0041
Source: State Street Corporation
Contact: State Street Corporation
Media:
Marie McGehee, 617-664-1898
or
River Communications
Troy Mayclim, 914-686-5599