What are State Street Global Advisors?

The asset management branch of State Street Corporation, State Street Global Advisors, was created in 1978 in Boston, Massachusetts. 

The company’s first three products 

• The domestic index fund
• An international index fund (based on the MSCI EAFE index)
• Short-term investment fund 

By 1989, the division’s assets were $53 billion (USD). State Street Global Advisors was established in 1990 as a distinct company from State Street Bank to expand internationally.  

With the S&P 500 SPDR product release, traded on the American Stock Exchange in 1993, SSGA established the investment vehicle known as the exchange-traded fund (ETF). 

State Street Global Advisors (SSGA) is State Street Corporation’s investment management subsidiary and the 4th largest asset manager, with roughly $4.14 trillion in assets under administration as of December 31, 2021.  

After BlackRock and Vanguard, SSGA is the world’s third-largest ETF manager. States, corporations, foundations, non-profit foundations, business financial officers and CFOs, investment firms, financial advisors, and other intermediaries worldwide use the company to create and manage investment plans. 

The company has won several accolades for its services.

Some of the prominent awards are 

• Asia Asset Management’s 2022: Best of the Best Awards- At Asia Asset Management’s 2022 Best of the Best Awards, State Street was named Best Global Custodian in Asia-Pacific (25 years) and Best Middle and Back Office Provider. 
• HFM Asia Services Awards 2021: State Street was named Best Hedge Fund Custodian for the second year in a row at the HFM Asia Services Awards 2021. 
• The Asset Triple A Sustainable Investing Awards for Institutional Investor, ETF and Asset Servicing Providers 2021- For the seventh year in a row, State Street was named Best in Securities Lending at The Asset Triple A Asset Servicing Providers Awards. 
• Aite Group 2020 Impact Innovation Awards The organization earned operational efficiency after being recognized as a financial institution that has used technology to raise the bar. 
• Asia money FX Survey 2020 In South Korea, Taiwan, and Thailand, State Street has been named Market Leader.

The company provides several ETFs and mutual funds to be chosen from. The company has a set of thematic ETFs which focus on cutting-edge innovation.  

The SPDR S&P Kensho New Economy ETFs have the backing of S&P Kensho’s forward-thinking and dynamic approach, which employs artificial intelligence to analyze regulatory filings to find and classify innovative enterprises based on factors other than revenue and balance sheet data. 

Some such ETFs are associated with Future security, clean power, smart mobility, space exploration, intelligent infrastructure, etc.  

Fixed-income ETFs come at a high degree of diversification with a 60% lower expense ratio than competitors. Investment worth $621 billion has been made by the firm in fixed-income assets with over 100 strategies. 

SPDR Blackstone Senior Loan ETF and SPDR Portfolio TIPS ETF are some of the fixed-income ETFs. There are more than 250 low-cost passively managed ETFs offered by the company all over the globe. 

Investors can use SPDR Portfolio ETFs to build large, diversified portfolios by choosing from equities and fixed-income exposures. SPDR Portfolio S&P 400™ Mid Cap ETF, SPDR Portfolio S&P 500® Growth ETF, etc., are some core ETFs. 

Gold-backed exchange-traded funds (ETFs) combine the gold market’s flexibility, openness, and accessibility with the cost-effective liquidity of an ETF wrapper through the company’s offerings.

The company offers two distinct products

1. SPDR Gold Shares

2. SPDR Gold Mini Shares

The company also provides a variety of ESG investing options along with sectoral investing options and Smart Beta ETFs. 

Along with ETFs, the firm also offers a variety of mutual funds to choose from – grouped into four categories SSGA Funds, State Street Institutional Funds, State Street Institutional Investment Trust, and State Street Variable Insurance Series Funds. These funds track indices like FTSE Russell, MSCI, Multiple/Blend, S&P Dow Jones, etc. 

Multiple ESG investment strategies

1. Screening

Negative screening excludes specific firms, sectors, or nations based on environmental, social, and governance (ESG) issues and an investor’s values-based goals.

Among the advantages are reduced reputational risk and the ability for investors to avoid providing capital to organizations or sectors that contradict their views. 

2. Best in class

This strategy focuses on investing in sectors and firms that outperform the industry peers in terms of ESG performance. 

3. ESG integration

To limit risk and uncover possibilities for long-term outperformance, active portfolio managers routinely include ESG signals and factors in the investment analysis and decision-making process. 

4. Climate investing

This thematic investment strategy aligns portfolios with the transition to a low-carbon economy and limits global warming to far below 2 degrees Celsius. 

5. ESG for index investing

ESG investors can benefit from index investing in various ways, including diversification and transparency. Index methods give investors a simple way to acquire broad diversification in their portfolios, which improves risk management. 

Thus, the pioneer of ETFs should be taken into account whilst creating a portfolio!