State Street Global Advisors Expands Smart Beta Offerings with New Fixed Income Strategy
September 19 2016 - 11:27AM
Business Wire
State Street Global Advisors (SSGA), the asset management
business of State Street Corporation (NYSE: STT), today announced
the expansion of its smart beta solutions with a new fixed income
smart beta strategy that aims to capture maximum returns in the
current climate of rising rates and increased fixed income
volatility. SSGA’s fixed income smart beta strategies give
institutional investors more control over their investment
objectives by moving beyond traditionally weighted benchmarks and
generating results through exposure to credit, term or liquidity
factor premia.
“Our fixed income strategy has evolved from a one-factor screen
to a multi-factor framework featuring research based factor
definitions, dynamic weighting and continuous portfolio reweighting
as factor exposures change,” said Lori Heinel, deputy chief
investment officer and chief portfolio strategist at State Street
Global Advisors. “SSGA’s fixed income smart beta solution can both
improve returns and decrease volatility by isolating factors with
greater precision.”
While smart beta has been employed for decades with equities to
pursue better risk-adjusted returns, investors have been slower to
adopt these strategies on the fixed income side. However, results
from smart beta strategies have proven to be even stronger for
fixed income, as neither a passive or active approach achieves
fixed income investment objectives. As fixed income investors are
typically positioned around duration, credit, term, and liquidity
in every investment, factor based investing is a natural fit for
fixed income.
“SSGA has a history in identifying the systematic sources of
variation in fixed income returns; and its large size and scale
makes it well positioned to capture returns in a cost efficient,
transparent way,” said Ritirupa Samanta, managing director, global
head of systematic fixed income at State Street Global Advisors.
“Our market leading position managing $350 billion in passive
global fixed income also allows for the management of investments
through constrained liquidity and issuance environments, two of the
biggest challenges of investing in fixed income.”
State Street Global Advisors has been providing smart beta
strategies to help clients maximize returns in challenging economic
conditions for more than 20 years. With a range of more than 100
smart beta offerings, SSGA is a pioneer in smart beta and factor
investing solutions. For more information on SSGA’s Fixed Income
Smart Beta solutions, visit http://smartbeta.ssga.com/
About State Street Global Advisors
For nearly four decades, State Street Global Advisors has been
committed to helping our clients, and those who rely on them,
achieve financial security. We partner with many of the world’s
largest, most sophisticated investors and financial intermediaries
to help them reach their goals through a rigorous, research-driven
investment process spanning both indexing and active disciplines.
With trillions* in assets, our scale and global reach offer clients
access to markets, geographies and asset classes, and allow us to
deliver thoughtful insights and innovative solutions.
State Street Global Advisors is the investment management arm of
State Street Corporation.
*Assets under management were $2.3 trillion as of June 30,
2016. AUM reflects approx. $40 billion (as of 6/30/2016) with
respect to which State Street Global Markets, LLC (SSGM) serves as
marketing agent; SSGM and State Street Global Advisors are
affiliated.
Smart beta: Smart beta defines a set of investment
strategies that use alternative index construction rules to achieve
outperformance over first-generation market capitalization based
indices. Smart beta indices isolate six particular "factors" - -
small size, value, high yield, low volatility, quality, and
momentum - - and are again designed to deliver better risk-adjusted
returns than cap-weighted indices.
Important Information
Investing involves risk, including the risk of loss of
principal.
The information provided does not constitute investment
advice and it should not be relied on as such. It should not be
considered a solicitation to buy or an offer to sell a security. It
does not take into account any investor's particular investment
objectives, strategies, tax status or investment horizon.
You should consult your tax and financial advisor. All material
has been obtained from sources believed to be reliable. There is no
representation or warranty as to the accuracy of the information
and State Street shall have no liability for decisions based on
such information.
A Smart Beta strategy does not seek to replicate the
performance of a specified cap-weighted index and as such may
underperform such an index. The factors to which a Smart Beta
strategy seeks to deliver exposure may themselves undergo cyclical
performance. As such, a Smart Beta strategy may underperform the
market or other Smart Beta strategies exposed to similar or other
targeted factors. In fact, we believe that factor premia accrue
over the long term (5-10 years), and investors must keep that long
time horizon in mind when investing.
©2016 State Street Corporation. All rights reserved.
CORP-2206
Exp. Date: 9/30/17
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State Street CorporationAndrew Hopkins, +1
617-664-2422Ahopkins2@StateStreet.com
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