State Street Global Advisors to close 19 ETFs

State Street Global Advisors, the asset management arm of State Street (STT) announced that it was planning to close and liquidate 19 exchange-traded funds after the market's close on Friday, June 30, 2017.

1. SPDR Bloomberg Barclays 0-5 Year TIPS (SIPE)
2. SPDR EURO STOXX 50® Currency Hedged (HFEZ)
3. SPDR MSCI Australia StrategicFactorsSM (QAUS)
4. SPDR MSCI Spain StrategicFactorsSM (QESP)
5. SPDR S&P® Emerging Europe (GUR)
6. SPDR S&P Emerging Latin America (GML)
7. SPDR S&P Emerging Middle East & Africa (GAF)
8. SPDR S&P International Consumer Discretionary Sector (IPD)
9. SPDR S&P International Consumer Staples Sector (IPS)
10. SPDR S&P International Dividend Currency Hedged (HDWX)
11. SPDR S&P International Energy Sector (IPW)
12. SPDR S&P International Financial Sector (IPF)
13. SPDR S&P International Health Care Sector (IRY)
14. SPDR S&P International Industrial Sector (IPN)
15. SPDR S&P International Materials Sector (IRV)
16. SPDR S&P International Technology Sector (IPK)
17. SPDR S&P International Telecommunications Sector (IST)
18. SPDR S&P International Utilities Sector (IPU)
19. SPDR S&P Russia (RBL)

The final day for share creations will be July 24 for most of these ETFs. The Emerging Europe, Emerging Latin America, and Emerging Middle East & Africa ETFs' final share creation day will be July 21. Trading of all of these will be suspended on the NYSE Arca on July 25.

State Street Lowers Expenses on Sector ETFs

State Street Global Advisors recently lowered its fees by 1 basis point on all its sector ETFs in what appears to be a growing competitiveness in garnering a greater piece of the market share.

According to an SEC filing , SSgA lowered the expense ratios on all nine of its sector ETFs to 0.18%:

• Consumer Discretionary Select Sector SPDR Fund (NYSEArca: XLY)
• Consumer Staples Select Sector SPDR Fund (NYSEArca: XLP)
• Energy Select Sector SPDR Fund (NYSEArca: XLE)
• Financial Select Sector SPDR Fund (NYSEArca: XLF)
• Health Care Select Sector SPDR Fund (NYSEArca: XLV)
• Industrial Select Sector SPDR Fund (NYSEArca: XLI - News )
• Materials Select Sector SPDR Fund (NYSEArca: XLB - News )
• Technology Select Sector SPDR Fund (NYSEArca: XLK - News )
• Utilities Select Sector SPDR Fund (NYSEArca: XLU - News )

The timing of SSgA’s actions appears to be a response to Vanguard ’s commitment to lower expenses. However, Dan Dolan, Director of Wealth Management Strategies for the Select Sector SPDR Trust, stated that the decision was made based on their asset growth and economies of scale.

“The economy notwithstanding, 2011 was a banner year for us, both in terms of the increase in our average assets and the growth in our overall year-end assets,” Dolan said in a press release.

In December, Vanguard announced that it lowered the expense ratios on its line of sector funds to 0.19% each:

• Vanguard Consumer Discretionary ETF (NYSEArca: VCR - News )
• Vanguard Consumer Staples ETF (NYSEArca: VDC - News )
• Vanguard Energy ETF (NYSEArca: VDE - News )
• Vanguard Financials ETF (NYSEArca: VFH - News )
• Vanguard Health Care ETF (NYSEArca: VHT - News )
• Vanguard Industrials ETF (NYSEArca: VIS - News )
• Vanguard Information Tech ETF (NYSEArca: VGT - News )
• Vanguard Materials ETF (NYSEArca: VAW - News )
• Vanguard Telecommunication Services ETF (NYSEArca: VOX - News )
• Vanguard Utilities ETF (NYSEArca: VPU - News )

Nuveen jumps into ETF market

Firm will subadvise State Street Global Advisors' five muni bond ETFs

Nuveen Investments LLC is breaking into the exchange-traded-fund arena through a partnership with State Street Global Advisors.

Starting April 1, Nuveen will subadvise SSgA's five municipal bond exchange-traded funds. Under the exclusive arrangement, SSgA Funds Management Inc. will remain the adviser for the municipal bond SPDR ETFs, but the funds' portfolio manager, Tim Ryan, will join Nuveen.

Given the amount of flows going into muni bond ETFs, SSgA wanted to tap Nuveen's municipal bond expertise, said Anthony Rochte, senior managing director with SSgA.

“In addition to managing the day-to-day products, we can also pick up the research on municipal bonds which Nuveen does so well,” Mr. Rochte said.

The five SPDR ETFs picked up $1.1 billion in assets in 2009, and currently have a total of $2 billion.

Nuveen hopes this type of arrangement is just the first of many as it hopes to subadvise more muni bond ETFs, said Bill Huffman, chief operating officer and co-head of Nuveen Asset Management.

“With the potential for higher taxes, and the tax-exempt nature of municipal bonds, we wanted to add another wrapper for these products,” Mr. Huffman said. “We will look to do other products as they relate to municipal bonds.”

As a result of the arrangement, Nuveen is opening a Boston office, where Mr. Ryan will work, Mr. Huffman said. The firm has not yet decided if it will be hiring additional staff for that office.