State Street partners with MFS on active ETFs

January 10, 2014 5:18 AM

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State Street Corp., the second-biggest provider of exchange-traded funds, plans to introduce its first actively managed stock ETFs in partnership with MFS Investment Management.

The three funds, the SPDR MFS Systematic Core Equity ETF, Growth Equity ETF and Value Equity ETF, will open tomorrow on the New York Stock Exchange, according to a statement yesterday from NYSE Euronext.

Fund companies for years have contemplated ways to combine the security selection of active mutual funds with the ease of trading and cost savings of ETFs, most of which track indexes. The transparency of ETFs, which are required to reveal all their holdings daily, has discouraged many would-be providers, especially equity investors.

Actively managed funds account for about $14.7-billion, or 0.9% of U.S. ETF assets, according to data compiled by Bloomberg.

State Street, based in Boston, offers 197 ETFs holding $413-billion in assets, second only to New York-based BlackRock Inc.’s $898-billion, according to the data. Boston-based MFS, manager of the first open-end mutual fund in the U.S., oversaw $413-billion in assets as of Dec. 31, according to Daniel Flaherty, a spokesman. MFS is a unit of Toronto-based Sun Life Financial Inc.


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