For all of the attention that BGI, Vanguard, PowerShares and even ProShares, Rydex and Claymore have been getting lately, SSgA— with still the largest ETF and second-largest total ETF assets BY FAR—has quietly built a stable of world-class products.Matt, your comment on SSgA's clever front-running of BGI on price, just as the new BGI muni funds are out the gate first to market, is a classic illustration of how SSgA really seems to be (precisely) on the ball lately. In particular, the product offerings are really strong. Look at all of the new funds they've launched. They've got a lot of great funds from an intelligent indexed asset allocation investor's standpoint.
In fact, the recent launches merit a little top 10 (I think it came out to more like 20) list of their own, there have been so many. I think, as with the Vanguard ETFs when they first came out, a lot of people (advisors particularly) are just now becoming acquainted with them. The fact that a LOT of them have launched in just the last year or two is obviously a part of this. Here's an intro. I'll bet a lot of them did not even know that ETFs had even been launched in some of these spaces (I'm talking to you Hougan—Mr. ETF WATCH himself). OK, maybe Matt knows.
- SPDRS MSCI All World ex-US (CWI). How BGI never launched that one, I'll never know. But SSgA happens to hold the #1 all world brand in its arsenal. Their only competition now on these funds (that I love) are the Vanguard FTSE all world. 35 bps. Vanguard's FTSE ex US offering is 25 bps.
- SPDRS S&P All World ex US (GWL). This one is the parent of the series of excellent S&P Citigroup BMI Indexes. Also 35 bps.
- SPDR International Small Cap (GWX). What a concept, eh? And they're doing it using those same S&P Citigroup BMI's.
- SPDR S&P China (GXC). If the monster performer FTSE Xinhua (80%+ last year if I remember right) is the Dow of China, this baby is the S&P 500. It's amazing that nobody even knows about it (March launch). This is a dark horse to become a very big fund. It's running 60 bps to FXI's 74 and it's at only $88 million in assets to FXI's $6.4 BILLION (at 74 bps). And best of all, it's got 126 stocks in it according to the SSgA site, compared with 25 in the FTSE Xinhua. (I'd also note here that SSgA's Web site has been radically improved ... I always used to go to the AMEX site for SPDRs info. Now http://www.ssgafunds.com/ has definitely caught up and is in the vicinity of the gold standard http://www.ishares.com/ site).
- Speaking of Gold Standard, of course you all know that GLD (streetTRACKS Gold Shares) is one of my favorite funds, with its direct access to gold bullion in a share.
- SPDR Emerging Europe (GUR). Who knew? At 60 bps, this fund is sexier than Borat in a day-glo green thong bikini.
- SPDR Emerging Asia/Pacific (GMF). Cool fund with direct access to a strong index and a very appealing asset class.
- SPDR S&P BRIC 40 (BIK). Buzzword from early 2006? SSgA's got it covered.
- SPDR Emerging Markets (GMM). Again, the mother to this subfamily under the S&P Citigroup series and in itself, at 60 bps, is likely more appealing than the iShares behemoth EEM, which is priced at 74 bps (and even adjusting for that expense ratio, EEM has struggled mightily this year in its bulk to keep up with its benchmark index. The Vanguard offering (VWO) is priced at 30 bps.)
- SPDR DJ STOXX 50 (FEU). I've never understood why this most hyper-liquid of European indexes never got good pick-up in the U.S. It's SSgA's.
- Another cast-off, and my true first love in indexing, as I mentioned in another blog, is TMW, the DJ Wilshire 5000 Total Market funds. I cried like a little girl for days when Vanguard dumped the DJ 5000. Now she's back, though. I think I just might buy some shares for old times' sake. Hey guys, can we reel in the 21 bps expense ratio a bit? The two iShares Total Market funds come in at 20 bps, and the Vanguard fund is SEVEN. Bring it down to 5 and I'll talk about it at least once a week in my blog. This thing is a $125 million fund. The Vanguard is $8.5 BILLION. Run the numbers on that...
- SPDR Lehman Agg (LAG), Short (BIL), Intermediate (ITE) and Long (TLO) Bonds. Two words for you here: "Thirteen Basis Points" (wedged snuggly between Vanguard's 11 bps, and iShares' 15-20 bps, it makes you think about keeping an eye on tracking).
- Diamonds (DIA). Another fund that makes me weak at the knees for old time's sake ... it's a fund that's held onto assets and more than held its own in terms of performance. And it's got the coolest name EVER. (Sorry Spider or SPY or whatever you are ...)
- StreetTRACKS Russell/Nomura (JPP) index and Small Cap (JSC). Hefty names with Russell and Nomura and a streetTRACKs holdout (must be some S&P licensing issue?). Mixing it up here with WisdomTree's small Japan (DFJ).
- StreetTRACKS KBW Regional Banks (KRE) was the first of its kind and a great idea for those looking for a little extra correlation bang.
- SPDR Metals and Mining (XME). I know that Van Eck's steel fund (SLX) has gone gangbusters this year with 40%+ on the returns table, and this one in a bit of a different zone is over 20% YTD itself.
- streetTRACKs DJ International Real Estate (RWX). This was one of the first funds in what I like to think of as SSgA's rebirth. A huge, entirely homegrown home run, and the first in its area.
Innovation is BACK at SSgA. Look at all those strong funds, and they're priced to sell. People really should wake up to SSgA a bit more. These aren't your grandpappy's Spiders anymore. And not only that, they're getting the hang of tweaking back at BGI, the masters of the tweak, a bit with the frontrun on the muni pricing, snagging of the Freakonomics guys for an event (love that ... of course you know what those guys are: "precision thinkers") and um, snagging Tony Rochte away.
So it's all good. It's really nice to see a megaplayer catching up to its brand and its assets with its ETF product lineup. It will be interesting to see where things go from here. PowerShares shows no sign of stopping (and Bruce Bond certainly could), Vanguard has obviously turned the corner, and BGI still looks like world-beating innovators w/ the ETNs and some of these other funky products, even though they're already the behemoth. They're not exactly going with the Microsoft option of stake it out and sit on it. And really they can't because this is open architecture, baby. And you're free to pick whatever funds you want whenever you want them. And flows ultimately tend to gravitate toward quality in this arena.
Written by Jim Wiandt