SSgA makes ETFs more accessible to UK pension schemes

Dec 9th, 2013 | By | Category: ETF and Index News

State Street Global Advisors (SSgA), sponsor of the SPDR ETF range, has launched a suite of ETF sub-funds in its Managed Pension Fund (MPF) in a bid to make its ETF products more accessible to UK pension schemes.

SSgA makes SPDR ETFs more accessible to UK pension schemes

State Street Global Advisors has made a selection of its SPDR ETF range more accessible to smaller UK pension schemes.

The initiative broadens the range of asset classes available to UK pension schemes and provides smaller schemes with an easier way to access ETFs.

Mark McNulty, Head of UK Institutional at SSgA, said: “We see this development as an important and necessary step for small and medium UK pension funds. They can now make long-term investment allocations to a broader range of investment markets, including specialty assets such as emerging market debt and quality income tilted equities.”

ETFs have historically had limited appeal to smaller and medium UK pension funds because of the obstacles they face when investing in them. ETFs are classified as a share, which means a pension scheme would be required to have a direct brokerage account to trade the ETF and a direct custodian account to hold the ETF, making the ETF vehicle more difficult to access and use for all but the largest schemes in the UK.

By investing in the MPF wrapper, which is a limited liability insurance company, pension fund investors can now access a range of asset classes such as emerging market fixed income as well as quality dividend equity indices through ETFs that already exist in the market some of which have limited availability to pension funds.

SPDR ETFs now available in the MPF wrapper include:

SPDR BofA Merrill Lynch Emerging Markets Corporate Bond UCITS ETF
SPDR Barclays EM Inflation Linked Local Bond UCITS ETF
SPDR Barclays Emerging Markets Local Bond UCITS ETF
SPDR S&P Emerging Markets Dividend UCITS ETF
SPDR S&P Euro Dividend Aristocrats UCITS ETF
SPDR S&P UK Dividend Aristocrats UCITS ETF
SPDR S&P US Dividend Aristocrats UCITS ETF
SPDR S&P Global Dividend Aristocrats UCITS ETF

SSgA manages more than $360 billion in SPDR ETF assets worldwide (as of September 30, 2013) and is one of the largest ETF providers globally. Within Europe, it offers 53 different ETFs listed across multiple European exchanges.

Earlier this year, iShares unveiled an initiative deigned with similar objectives in mind. It introduced a facility whereby UK pension funds and other institutional investors could access ETFs directly through their custodians, including BNY Mellon, State Street, HSBC and JP Morgan, without the need for a separate brokerage account.

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