Boston firm now controls prime properties in ETF marketplace, rolls out fresh product lineup as well.
State Street Corporation of Boston, which owns State Street Global Advisors, has acquired the licensing rights to three of the largest and best-known ETFs from the American Stock Exchange: SPDRs (SPY), MidCap SPDR (MDY), and DIAMONDS (DIA). Collectively, these ETFs represent one-third of the ETF market.
The funds will continue to be listed on the Amex. But State Street is now exclusively responsible for their marketing, as well as for their daily custodial and managerial operations (which are handled by State Street Bank and Trust and SSgA respectively); Denver-based ALPS Distributors remains the distributor for the SPDR, MidCap SPDR and Diamonds trusts. The nine Select Sector SPDRs were not part of State Street's recent licensing deal and will continue to be marketed by ALPS.
"It simply formalizes an arrangement that's been in place for years," says SSgA's Gary MacDonald. "This transaction continues to strengthen the long-standing relationship between State Street and the Amex that started with the co-development of the SPDR Trust in 1993."
In recent months, the Amex has seen its leadership in ETF listings challenged by the NYSE and Nasdaq. This latest move could signal a shift by the stock exchange to a revitalized focus on new ETF product development. With the marketing of these three ETFs now under the watchful eye of State Street, the Amex can center its attention on other matters.
"The assignment of licensing rights to State Street allows them to take a more direct role in the marketing of the SPDR and DIAMONDs products," explains Cliff Weber, senior vice president of the exchange-traded marketplace for Amex. "Along with their upcoming product launches, this is just another aspect of their strengthened commitment to building their ETF presence. From our standpoint, it allows us to keep our efforts devoted to supporting all of our issuers and innovating the next generations of ETFs."
