The First US ETF Remains the Liquidity Leader as Investors
Enter the New Year Uncertain About the Market and Economy
- More than half of US investors with ETFs in their portfolio
believe ETFs have made them a better investor.
- Nearly 60% say ETFs have improved the overall performance of
their portfolio.
- Globally, just over half of investors agree ETFs offer more
liquidity to respond more rapidly to market changes and mitigate
risk better in volatile markets compared to other investments.
- In the US, pessimism about the country’s economic outlook in
the next 12 months has increased more than 50% since surveyed three
years ago (25% to 38%).
- US investors with ETFs in their portfolios are more likely to
be optimistic about their financial future over the next 12 months
than those without (75% vs. 68%).
State Street Global Advisors, the asset management business of
State Street Corporation (NYSE: STT), marked the 30th anniversary
of the first ever US-listed exchange traded fund (ETF) this month,
the SPDR S&P 500 ETF Trust (SPY). Launched on January 22, 1993,
SPY is the world’s largest ETF with more than $355 billion in
assets and the most heavily traded security in the world with an
average daily trading volume of $39 billion.*
“SPY gave birth to an industry that has democratized investing,
giving both investors large and small access to institutional-grade
solutions that offer efficient, cost-effective exposures to all
corners of the global investment market,” said Rory Tobin, head of
State Street Global Advisors’ Global SPDR ETF Business. “Born out
of the stock market crash of 1987, SPY has demonstrated its
resilience throughout major market events from the burst of the
dot-com bubble to the global financial crisis of 2008, and more
recently, the extreme pandemic-era volatility.”
“SPY disrupted the asset management industry and benefitted
investors in ways that exceeded even the most ambitious
expectations,” said Sue Thompson head of SPDR Americas Distribution
at State Street Global Advisors. “Three decades since SPY’s launch,
investors now have access to more than 8,000 ETFs globally, but
none come close to offering the liquidity of SPY, which provides
transaction cost benefits that can lower total cost of ownership
for investors.”
“S&P Dow Jones Indices congratulates State Street Global
Advisors on this momentous occasion. This 30-year milestone and the
tremendous growth of ETFs during this time, reflect the
transformational benefits being provided to all end investors,”
said Dan Draper, Chief Executive Officer at S&P Dow Jones
Indices.
A History Steeped in Liquidity & Resiliency
Since SPY’s launch, US-listed ETFs have amassed $6.5 trillion in
assets.*
Toward the end of 2022 SPY was trading three times more than
Apple (AAPL) — the largest security in the world by market cap.**
That volume, combined with the size of SPY’s assets, performance,
liquidity, and resilience, has been vital to investors as they
construct asset allocation portfolios and navigate extreme market
events.
In fact, as the market began to tumble during the onset of
COVID-19, SPY became the first ETF to ever trade more than $100
billion in a single day on February 28, 2020.**
“Throughout each market turn, SPY’s unparalleled liquidity
profile provided investors with the flexibility to buy and sell
shares quickly, easily, and cost-efficiently,” Tobin added.
ETF Impact Survey shows the positive impact ETFs have on
investors today
Today, ETFs have become core building blocks for investors
making asset allocation decisions. The expansion of ETFs to include
different types of funds in a variety of asset classes further
added to their appeal.
Recent findings from State Street Global Advisors ETF Impact
Survey reaffirm the popularity of ETFs as a vehicle that can help
investors remain confident in their investing acumen. The survey
was designed to understand investor attitudes and perceptions about
ETFs, the market and the economy in the US, APAC and EMEA.
Overall, the perceived benefits ETFs have brought to investors
globally is overwhelmingly positive- whether or not they even own
ETFs. More than half agree ETFs are an investor-friendly investment
product (58%) and are better diversified than other investment
products (54%).
Furthermore, investors who do have an existing ETF holding
report that ETFs have improved the overall performance of their
portfolio (73% globally and 59% in the US alone). And, the majority
believe ETFs have made them a better investor (67% globally and 53%
in the US).
Liquidity Remains Important Amidst Investor Uncertainty on
Markets and Economy
Globally, nearly seven-in-ten investors believe the volatility
in the stock market is going to continue for at least the next 12
months. Six-in-ten investors agree that when there is volatility in
the market it is important to have more liquid investments.
Regardless of whether they have ETFs in their portfolio,
globally, more than half of investors agree ETFs offer more
liquidity to respond rapidly to market changes (52%) and can
mitigate risk better in volatile markets compared to other
investments (51%).
More Room for Growth and Innovation
Despite the explosive growth of the ETF industry since SPY’s
launch, the survey suggests the industry still has a long runway
for expansion in the US, as just 40% of investors say they own an
ETF in their portfolio, which is considerably lower than stocks
(83%), mutual funds (67%) and bonds (53%). When asked if they plan
to buy ETFs in the next 12 months, 50% of investors globally
indicate they do, compared to 37% in the US.
About State Street Global Advisors’ ETF Impact Survey,
November - December 2022 State Street Global Advisors, in
partnership with A2Bplanning and Prodege, conducted an online
survey among individual investors in the US, EMEA (UK, Switzerland,
Netherlands, Israel) and APAC (Singapore, Japan, Australia). Data
was collected from November 30 – December 12, 2022. In the US, data
was collected from a nationally representative sample of 1,000
adults 18+, and then filtered for analysis among 287 Individual
Investors with investable assets of $250,000 or more.
About SPDR Exchange Traded Funds SPDR ETFs are a
comprehensive family spanning an array of international and
domestic asset classes. The funds provide investors with the
flexibility to select investments that are aligned to their
investment strategy. For more information, visit www.ssga.com.
About State Street Global Advisors For four decades,
State Street Global Advisors has served the world’s governments,
institutions and financial advisors. With a rigorous, risk-aware
approach built on research, analysis and market-tested experience,
we build from a breadth of index and active strategies to create
cost-effective solutions. And, as pioneers in index, ETF, and ESG
investing, we are always inventing new ways to invest. As a result,
we have become the world’s fourth-largest asset manager* with US
$3.48 trillion† under our care.
*Pensions & Investments Research Center, as of 12/31/21.
†This figure is presented as of December 31, 2022 and includes
approximately $58.60 billion USD of assets with respect to SPDR
products for which State Street Global Advisors Funds Distributors,
LLC (SSGA FD) acts solely as the marketing agent. SSGA FD and State
Street Global Advisors are affiliated. Please note all AUM is
unaudited.
*Bloomberg Finance L.P., State Street Global Advisors, as of
December 31, 2022.
**Bloomberg Finance L.P., as of December 12, 2022
Important Risk Disclosures
Investing involves risk including the risk of loss of
principal.
ETFs trade like stocks, are subject to investment risk,
fluctuate in market value and may trade at prices above or below
the ETFs net asset value. Brokerage commissions and ETF expenses
will reduce returns.
Equity securities may fluctuate in value and can decline
significantly in response to the activities of individual companies
and general market and economic conditions.
This communication is not intended to be an investment
recommendation or investment advice and should not be relied upon
as such.
The S&P 500® Index is a product of S&P Dow Jones Indices
LLC or its affiliates (“S&P DJI”) and have been licensed for
use by State Street Global Advisors. S&P®, SPDR®, S&P 500®,
SPY®, SPX®, US 500 and The 500 are trademarks of Standard &
Poor’s Financial Services LLC (“S&P”); Dow Jones® is a
registered trademark of Dow Jones Trademark Holdings LLC (“Dow
Jones”) and has been licensed for use by S&P Dow Jones Indices;
and these trademarks have been licensed for use by S&P DJI and
sublicensed for certain purposes by State Street Global Advisors.
The SPDR S&P 500 ETF Trust (“SPY”) is not sponsored, endorsed,
sold or promoted by S&P DJI, Dow Jones, S&P, their
respective affiliates, and none of such parties make any
representation regarding the advisability of investing in such
product(s) nor do they have any liability for any errors,
omissions, or interruptions of these indices.
Distributor: ALPS Distributors, Inc., member FINRA, is
distributor for SPDR® S&P 500®, SPDR® S&P MidCap 400® and
SPDR® Dow Jones Industrial Average, all unit investment trusts.
ALPS Distributors, Inc. is not affiliated with State Street Global
Advisors Funds Distributors, LLC.
Before investing, consider the funds’ investment objectives,
risks, charges and expenses. To obtain a prospectus or summary
prospectus which contains this and other information, call
1-866-787-2257 or visit ssga.com. Read it carefully.
Not FDIC Insured · No Bank Guarantee · May Lose Value
State Street Global Advisors, 1 Iron Street, Boston, MA
02210-1641. © 2023 State Street Corporation.
All Rights Reserved.
5396273.1.1.AM.RTL Exp. Date: 01/31/2024 Control number
SPD002945
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Deborah Heindel +1 617 662 9927 DHEINDEL@StateStreet.com
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