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Portfolio > ETFs

State Street Enhances SPDR Portfolio ETFs: Portfolio Products

By Jeff Berman

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State Street Global Advisors made index changes to four of its low-cost SPDR Portfolio ETFs that it said have a combined $11.3 billion in assets.

The changes were in response to demand that the firm provide a “more stratified” exchange-traded fund toolkit targeting segments of the U.S. equity market in a cost-effective manner, it said.

As part of the changes, the SPDR Portfolio Large Cap ETF has become the SPDR Portfolio S&P 500 ETF (SPLG) and its benchmark shifted from the SSGA Large Cap Index to the S&P 500 Index. Its net expense ratio has remained 0.03%.

Also: The SPDR Portfolio Mid Cap ETF has transitioned to the SPDR Portfolio S&P 400 Mid Cap ETF (SPMD) and its benchmark shifted from the S&P 1000 Index to the S&P MidCap 400 Index (net expense ratio still 0.05%); the SPDR Portfolio Small Cap ETF was renamed the SPDR Portfolio S&P 600 Small Cap ETF (SPSM) and its benchmark shifted from the SSGA Small Cap Index to the S&P SmallCap 600 Index (still 0.05%); and the SPDR Portfolio Total Stock Market ETF has become the SPDR Portfolio S&P 1500 Composite Stock Market ETF (SPTM) and its benchmark changed from the SSGA Total Stock Market Index to the S&P Composite 1500 Index (still 0.03%).

In addition to those changes, a voluntary fee waiver of 0.10% was implemented on the SPDR S&P 600 Small Cap ETF (SLY) to lower the fund’s expense ratio from 0.15% to 0.05%.

Launched in 2017, the SPDR Portfolio suite was designed to give investors greater choice in low-cost ETFs. The suite includes 22 SPDR ETFs that provide low-cost access to a wide range of core equity and fixed income asset classes. With the changes, nine of 11 low-cost equity SPDR Portfolios ETFs are now benchmarked to S&P indexes, “driving more consistency across the suite in terms of methodologies and market coverage, simplifying portfolio construction for investors,” the company said.

Pacer ETFs Acquires CSOP FTSE China A50 ETF

Pacer ETFs acquired the CSOP FTSE China A50 ETF (AFTY; 0.70% net expense ratio). The purchase price wasn’t disclosed.

The fund was renamed the Pacer CSOP FTSE China A50 ETF, but its ticker remains AFTY.

This is Pacer’s second acquisition of an existing ETF in two months, following the firm’s purchase of American Energy Independence ETF from SL Advisors, which marked its first acquisition of an existing ETF.

The Pacer CSOP FTSE China A50 ETF seeks to track the FTSE China A50 Net Total Return Index and offers exposure to the 50 largest companies in the China A-Shares market, Pacer said. The index only trades A-shares, which Pacer noted are “distinct in that only companies incorporated in Mainland China and listed on the Shanghai or Shenzhen exchange are included.”

“We are always looking to grow at Pacer ETFs and this acquisition is just building upon our momentum as we grow organically and through acquiring funds we see value in,” according to Sean O’Hara, president of Pacer ETFs Distributors.

Bloomberg’s Gender-Equality Index Expands

Bloomberg’s Gender-Equality Index has expanded for 2020 to include 325 public companies from 42 countries and regions, up from 230 firms across 36 countries and regions in last year’s index.

The 2020 Bloomberg Gender-Equality Index tracks the financial performance of public companies committed to supporting gender equality via policy development, representation and transparency.

Countries were added because “for the first time, firms headquartered in the Czech Republic, New Zealand, Norway, the Philippines, Poland and Russia are reporting gender-related data,” Bloomberg said. The company also expanded the types of metrics included in the GEI framework this year, with companies reporting on information such as the likelihood a woman will remain employed at the firm following parental leave (82%), the availability of on-site lactation rooms (69%), and sponsorship of STEM education programs for women (64%), it said.

Firms included in the index have a combined market capitalization of $12 trillion, up from $9 trillion last year.

Bloomberg GEI’s total return of 31.50% outperformed the Morgan Stanley Capital International World Index total return of 27.30% from Dec. 31, 2018, through Dec. 31, 2019, according to Bloomberg.

Vident to Reduce Fees Across Its ETFs

Vident Advisory is lowering the fees across all four of its ETFs, the Vident Financial subsidiary said.

The Vident International Equity Fund (VIDI) expense ratio is dropping from 0.61% to 0.59%, while Vident Core U.S. Equity Fund (VUSE) is declining from 0.50% to 0.48%, Vident Core U.S. Bond Strategy ETF (VBND) is being reduced from 0.43% to 0.41% and PPTY-U.S. Diversified Real Estate ETF (PPTY) is falling from 0.53% to 0.49%.

“Our constant focus on reinvestment and reducing fees for our fund shareholders is at the core of our mission,” according to Vince Birley, CEO of Vident Financial. This is the “third time we’ve announced significant fee reductions for our ETF suite in just the last six years,” he said in a statement.

Rational Funds Launches Rational/Pier 88 Convertible Securities Fund

Rational Funds launched the Rational/Pier 88 Convertible Securities Fund (PBXIX), with a net expense ratio of 0.99% for institutional shares, 1.24% for Class A shares and 1.99% for Class C shares.

It’s the firm’s fourth hedge fund conversion, but its “first fund that focuses on convertible securities,” Rational Funds said.

The “objective” with PBXIX is to “seek total return consisting of capital appreciation and income,” the company said.

These “hybrid” securities “possess both fixed income and equity characteristics, with investment opportunities in bonds, preferred stocks or other securities that may be converted into a prescribed amount of common stock at a pre-stated price,” the firm noted.

The management team at Pier 88, which is serving as subadvisor to the fund, has invested in convertible securities for more than 10 years and has a “strong track record of managing such a strategy in both rising rate and equity downturn environments,” Rational Funds said.

— Check out last week’s Portfolio Products here: Fidelity Launches New Bond Model Portfolios: Portfolio Products

Jeff Berman

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