Investment Management
Capitalizing on our competitive strengths and industry growth
State Street Global Advisors, the corporation’s investment management business, is a pioneer in indexing and quantitative investing, and the creator of the first U.S.-listed exchange-traded fund (ETF).
Our investment solutions span the entire risk-return spectrum and cover all major asset classes across geographies, investment styles, and vehicles.
As the world’s fourth-largest investment manager,* our fundamental goal is to be the leading partner and provider of investment exposures and solutions to our clients.
Yie-Hsin Hung
President and Chief Executive Officer, State Street Global Advisors
Achieving remarkable success
For Global Advisors, 2023 was a year of significant growth and strategic innovation. We set a number of quarterly and annual flow records for the firm, while continuing to develop and deliver innovative and cost-effective solutions and insightful thought leadership to help investors navigate a challenging environment.
Assets under management (AUM) at year-end grew by 19 percent year over year to $4.1 trillion. Our ETF and cash franchises performed particularly well, reaching record levels of AUM, with ETFs at $1.27 trillion and institutional money market funds (MMFs) at $277 billion at year-end.
Investment performance was strong across the spectrum of our capabilities in 2023. On the index side, more than 99 percent of our strategies tracked their indices within specified tolerances and approximately 85 percent of active equity and fixed-income AUM outperformed benchmarks on a 1- and 3-year blended basis.
Demand for our target date fund (TDF) capabilities continued to be strong in 2023 with $15.5 billion of net flows. Since 2018, our global TDF AUM has grown from $65.7 billion to $188.6 billion, representing a 23 percent compound annual growth rate (CAGR).
Advancing our strategy through innovative solutions and regional growth
With the goal of increasing the firm’s competitive advantage and the delivery of investment exposures, Global Advisors innovated tailored solutions and provided insights for clients, while expanding State Street’s global leadership position in index investing, ETFs, cash, and multiasset-class solutions.
We continue to hone the value proposition of our low-cost SPDR portfolio ETF range and, following a strategic repricing in August, we generated more than $14 billion of net new asset flows from North America, Europe, the Middle East, and Africa.
SPDR® — the industry’s first U.S. ETF and the flagship of the S&P500 ETF Trust (SPY) — remains the world’s largest ETF and the most heavily traded security. In December, SPY recorded the highest single-day flow volume ever into the fund, with $20.8 billion in new assets.
In new assets — the highest single-day flow volume ever recorded by SPY
In 2023, we further invested in faster-growing asset classes, geographies, and client segments that leverage our strength and expertise.
Following our 2022 collaboration with Barclays Quantitative Portfolio Strategy (Barclays QPS), we continued to advance our systematic active fixed-income (SAFI) strategies. Today, we have more than $700 million in SAFI strategies and are seeing robust investment performance.
We also expanded our income solutions offerings to the defined contribution market both in the U.S. and globally.
In Asia Pacific, we leaned into Japan and Australia, adding ETFs and MMFs. In the Middle East, we established comprehensive on-the-ground coverage in the Kingdom of Saudi Arabia (KSA) to enhance our current presence in the Gulf Cooperation Council (GCC). In the U.S., we expanded our intermediary sales organization to focus on the wealth market, specifically on the broker-dealer and registered investment advisor channels.
To further underscore our commitment to clients, we formed a Global Client Coverage Group with the goal of partnering closely with our clients and bringing to them the best that Global Advisors has to offer. At the same time, we formed a new Global Business Office to focus on delivering best-in-class products and solutions,
expertise, and thought leadership to the marketplace and maintaining Global Advisors’ market leadership across our businesses.
“We believe in providing choice — both in the products we offer to our clients and through the investor voting choice program, which we continue to expand.”
Lori Heinel
Global Chief Investment Officer, State Street Global Advisors
Expanding proxy voting choices for our clients
As more shareholders seek to have greater influence and engagement with the portfolio companies in which they invest, Global Advisors responded by expanding our proxy voting program, giving investors unprecedented control over the votes of their shares in index equity funds.
Investors in U.S.- and U.K.-based equity index institutional funds, as well as U.S.-based equity index ETFs and mutual funds, now have the same power as institutional investors to direct the proxy votes of the shares they own in these funds.
Eligible index equity assets we manage covered by our proxy voting choice program
Our proxy voting choice program covers 80 percent of the eligible index equity assets we manage, including all U.S. institutional index equity funds and a broad range of U.S. index equity SPDR ETFs and mutual funds. This initiative brings us closer to achieving our goal of including all eligible index equity funds managed by the firm in the proxy voting program by the end of 2024.
Top industry awards and recognition
- Industry Innovation Award for Operational Excellence, Investor Voting Choice Program
Nicsa NOVA 2023 Award
- Northbound Outstanding Asset Management Company
Bond Connect Awards 2023
- Fund Managers of the Year (State Street Growth ETF Model)
Financial Newswire APAC and SQM Research 2023 Award
- Buy-Side Fixed-Income Trading Desk
The Trade Magazine 2023 Award
- No. 1 U.S. Equity Category, One-Year Performance
Barron’s Best Fund Families 2023 Rankings
- LDI Manager of the Year
UK Pension Age Awards 2024
Looking ahead
From our leadership role as co-founder of SPY 30 years ago, to our pioneering efforts in systematic quantitative investing, Global Advisors is focused on delivering the next set of capabilities that revolutionize investing.
In 2024, we will continue to reinforce our strong market position in core business lines, leveraging our business momentum to continue expanding our presence, capabilities, and reach in several key areas and markets.
Driven by our goal of being the world’s leading partner and provider of investment exposures and solutions to our clients, we will continue to be a steadying force in ever-changing markets.
