State Street Embraces New Investment Paradigm, Launches Investable Indices
March 06 2018 - 8:29AM
Business Wire
Rules-Based Indices Package Dynamic Investment Strategies in an
Index Wrapper
State Street Corporation (NYSE: STT) today announced it has
developed and begun licensing a suite of rules-based investment
strategies, or investable indices, for institutional investors.
“This is not smart beta or thematic investing,” said Will
Kinlaw, head of research and advisory for State Street Global
ExchangeSM. “These investable indices represent a new phase of
dynamic investing. We’re packaging an active strategy in
rules-driven index, where security weights can change dynamically
as relevant factors and big data indicators evolve.”
The new range of indices, called IntelliGXSM, initially
includes:
- GX Liquid Private Equity Index
Series, which seek to track a portion of aggregate private
equity performance by replicating private equity sector exposures
in liquid public markets
- GX Inflation-Managed Index
Series, which use the PriceStats® daily inflation series to
tilt towards assets that can offer protection when inflation is
rising, while also seeking to preserve higher yield during lower
inflation scenarios
- GX Risk-Managed Index Series,
which apply market fragility and turbulence indicators to adjust
exposure to risk premiums, such as the broad equity market, in
order to capture long-run portfolio growth while also mitigating
downside risk.
“We’re essentially creating living indices that are flexible,
evolving, transparent, and sensitive to new and meaningful
factors,” continued Kinlaw. “Rather than an index that constantly
tilts towards one particular factor, like inflation, our index will
lean into inflation-protected bonds when it sees inflation going up
and nominal treasury bonds when inflation is going down.”
“This is a natural next step in the evolution of indices,” said
John Plansky, global head of State Street Global Exchange.
“Investors are looking for different sources of alpha. We’re
integrating the worlds of academic theory and financial markets,
and using our unique access to new and alternative data sets, to
help asset owners and asset managers design investment strategies
that meet their changing portfolio needs. We’re providing the
recipe with which investors can make the meal in the form of an ETF
or another investable product.”
With IntelliGX, State Street designs the index, using its
highly-differentiated data sets sourced internally or from its
relationships with big data providers. Index specifications are
then delivered to a third-party calculation agent who independently
publishes index values. The licensee, or end-user asset owner or
asset manager, implements the index based on the weights received
in its investable product.
In addition to providing investment process transparency,
IntelliGX offers liquidity and cost-efficiencies as licensees can
expand their research capabilities at a variable cost.
For more information on State Street’s Investable Indices
business: https://www.ssgx.com/public/investableindices/#/
About State Street Corporation
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 $33.10 trillion in assets
under custody and administration and $2.78 trillion* in assets
under management as of December 31, 2017, State Street operates in
more than 100 geographic markets worldwide, including the US,
Canada, Europe, the Middle East and Asia. For more information,
visit State Street’s website at www.statestreet.com.
* AUM reflects approx. $35 billion (as of December 31, 2017)
with respect to which State Street Global Advisors Funds
Distributors, LLC (SSGA FD) serves as marketing agent; SSGA FD and
State Street Global Advisors are affiliated.
Important Information
All information has been obtained from sources believed to be
reliable, but its accuracy is not guaranteed. There is no
representation or warranty as to the current accuracy, reliability
or completeness of, nor liability for decisions based on such
information and it should not be relied on as such.
State Street Corporation, One Lincoln Street, Boston, MA
02111-2900.
© 2018 State Street Corporation - All Rights Reserved
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State Street CorporationBrendan Paul, +1
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