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State Street Debuts 3 Sector ETFs
September 29, 2011
State Street Global Advisors introduced three new sector exchange-traded funds (ETFs) today. The SPDR S&P Aerospace & Defense ETF (NYSEArca: XAR), SPDR S&P Health Care Services ETF (NYSEArca: XHS), and SPDR S&P Software & Services ETF (NYSEArca: XSW) joined the firm’s ETF sector lineup that includes 44 SPDRs with $58 billion in assets.
The three new SPDR industry ETFs are linked to S&P Select Industry Indices, which are designed to measure the performance of Global Industry Classification Standard (GICS) sub-industries. Constituent stocks are members of the S&P Total Market Index, which includes all common equities listed on the NYSE and NASDAQ US exchanges.
“Having pioneered the first sector ETFs in 1998, State Street Global Advisors continues to work closely with investors and advisors to develop new SPDR ETFs that provide precise exposure to a range of industries and sectors,” said James Ross, senior managing director and global head of SPDR Exchange Traded Funds at State Street Global Advisors. “By offering diversified, cost-efficient access to the aerospace and defense, health care services, and software and services sub-industries, these three new SPDR ETFs provide investors with an opportunity to gain tactical exposure without taking on the risk of buying an individual stock.”
Northern Trust Jumps back into ETF Business
After exiting the ETF business in early 2009, Northern Trust is back. The Chicago-based investment firm introduced four ETFs known as “FlexShares.”
The FlexShares Morningstar U.S. Market Factor Tilt Index ETF (NYSEArca: TILT) follows the broad U.S. stock market by tilting the portfolio toward the long-term growth potential of the smaller cap and value segments. The FlexShares Morningstar Global Upstream Natural Resources Index ETF (NYSEArca: GUNR) is focused on stocks in the natural resources sector.
The company also introduced TIPS ETFs with 3-year durations (NYSEArca: TDTT) and 5-year durations (NYSEArca: TDTF). The funds are linked to iBoxx indexes and are planning to distribute monthly income payments. The annual expense ratios for both TIPS ETFs are 0.20 percent.
In its original ETF stint, Northern Trust managed 17 funds with roughly $33 million in assets. The funds mostly tracked international and single-country stock benchmarks.
Guggenheim Acquires Rydex
Guggenheim Partners is merging Rydex SGI into its ETF asset management group. The consolidated ETF lineup, include the CurrencyShares and RydexShares pure style and equal weight products.
Guggenheim was founded in 2000 and began as an investment management firm for the Guggenheim family. The company made a name for itself among institutional investors for its expertise in fixed income. In 2009, Guggenheim acquired Claymore Group, an ETF provider with $1.6 billion in assets. Last year, the New York, NY-based company led a group of investors last year that bought Security Benefit Corp., Rydex SGI’s parent company.
Assuming the proxy voteto merge Rydex is approved, the ETFs will be rebranded under the Guggenheim name in Q1 2012.
According to Lipper, Guggenheim's $12 billion ETF lineup ranks eighth in the U.S. The company also manages around $24 billion in mutual fund assets. |
