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State Street Global Advisors Launches First Infrastructure ETF to Offer Combined Exposure to Equities and Bonds

Survey Reveals that more than One-Third of European Intermediaries and Institutional Investors Plan to Increase their Investment in Infrastructure

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State Street Global Advisors (SSGA), the asset management arm of State Street Corporation (NYSE: STT), today announced the launch of the SPDR® Morningstar Multi Asset Global Infrastructure UCITS ETF. The fund is the world’s first infrastructure exchange-traded fund (ETF) to offer investors combined exposure to both infrastructure equities and bonds. This launch follows the release of research by SSGA which shows that 35 percent of intermediaries and 33 percent of institutional investors plan to increase their investment in infrastructure as soon as the second quarter of 2015. [1]

The ETF, which listed on the Deutsche Börse Xetra today, tracks the Morningstar® Global Multi-Asset Infrastructure IndexSM. It allows investors to access the publicly available infrastructure universe in one trade.

SSGA recently surveyed 120 intermediary and institutional investors across Europe. The results found that 21 percent of intermediary investors and 20 percent of institutional investors who already invest in, or plan to invest in infrastructure consider using mutual funds or ETFs.

The findings also showed that investors investing in infrastructure directly or in unlisted private funds see illiquidity and the size of investment required as an issue in gaining access to the asset class. Amongst the intermediaries surveyed, 26 percent quoted illiquidity as a problem and 15 percent saw the size of investment required as a barrier to entry. Among institutional investors the figures were 20 percent and 18 percent, respectively, for both factors.

Commenting on the launch and the survey results, Alexis Marinof, head of SPDR ETFs EMEA, said, “Infrastructure investment has a number of key benefits: it has low correlation with traditional assets, provides access to long-duration and inflation linked assets and is less sensitive to business cycles.”

“Our new fund aims to fill a clear need in the market at a time when investor interest in infrastructure is strong. However, many investors don’t have the scale to invest in unlisted infrastructure or directly into debt securities, making it difficult for smaller investors to get exposure,” continued Marinof. “Our fund aims to combat this, by offering a regulated, open-ended vehicle through which to access the asset class. The ETF also helps larger investors who have an allocation to direct infrastructure, by offering a temporary home for committed, but uncalled capital.”

“The new ETF allows investors to benefit from a risk-adjusted returns profile that resembles direct investment in the underlying asset, but without the liquidity, transparency and cost issues otherwise associated with direct infrastructure investment.”

Sanjay Arya, head of Morningstar Indexes said, “The Morningstar Global Multi-Asset Infrastructure Index is a unique index that combines both equity and fixed-income exposures to infrastructure.”

“Spanning 18 industry segments, the broadly diversified global infrastructure index comprises companies that typically have long-duration assets, high entry barriers, provide essential services and demonstrate predictable revenue streams that are often indexed to inflation.”

There are now 65 SPDR ETFs available across Europe.

Next Finance April 2015

Article also available in : English EN | français FR


[1] The survey which was conducted at the end of 2014 had a sample size of 120 intermediary and institutional investors across the UK, Netherlands, Italy, Germany, France and Switzerland.



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