State Street Debuts 3 ETFs With Targeted Strategies
State Street Global Advisors, the asset management arm of State Street Corporation, has introduced three new ETFs designed to give investors a wider range of stock- and commodities-focused investment options while managing risk, according to a company press release.
The new offerings include the SPDR SSGA US Equity Premium Income ETF (SPIN), the SPDR S&P Emerging Markets ex-China ETF (XCNY), and the SPDR Bloomberg Enhanced Roll Yield Commodity Strategy No K-1 ETF (CERY).
SPIN has an expense ratio of 0.25%, XCNY charges 0.15%, and CERY comes with a 0.28% expense ratio, according to the press release.
New ETFs Target Specific Portfolio Needs
Matt Bartolini, head of Americas research at SPDR, said in an interview with etf.com that the new ETFs would address current market trends and investor needs.
“Let's just take SPIN first,” Bartolini said. “When we look at it, clients sort of have some central outcomes they're looking for when they build portfolios. The first, obviously, capital appreciation. The second is income. The third is managing risk.”
SPIN, an actively managed ETF, aims to enhance income generation through a dynamic call writing program while maintaining potential for long-term capital growth, Bartolini said.
“We're actually combining three different portfolio management teams into one ETF here,” Bartolini said. The fund integrates a fundamental equity team that builds the underlying portfolio, an investment solutions team that identifies market risk expectations, and a systematic equity team that implements the options overlay program.
This combination, according to Bartolini, allows SPIN to potentially generate income while maintaining upside potential.
XCNY seeks to track a market-capitalization-weighted index of emerging market companies, excluding those domiciled in China, Bartolini said.
“One of the reasons why you want to use emerging market equities in a portfolio is to be somewhat diversified globally, but then also seek out some potential for higher returns,” he said.
CERY aims to track the Bloomberg Enhanced Roll Yield Total Return Index, providing broad commodities market exposure with a focus on diversification and enhanced roll yields, according to Bartolini.
“The index that we're seeking to track, it's a very novel index in and of itself,” Bartolini said. They’re trying to be diversified across different aspects of the commodities market, "looking at different futures curves where they’re more in backwardation than in contango," he added.
Bartolini also discussed potential risks for each ETF. For SPIN, he noted that a bull rally could limit upside potential due to the covered call strategy. CERY and XCNY are more sensitive to macroeconomic conditions, he explained.
State Street Global Advisors manages 138 ETFs traded on U.S. markets with total assets under management exceeding $1.3 trillion, according to etf.com data. Its largest ETF is the $554.5 billion SPDR S&P 500 ETF Trust (SPY).
