With the launch of the SPDR S&P 500 (SPY) back in 1993, State Street (STT) basically created the modern ETF industry. Today, the SPY is not only the largest ETF, but one of the most heavily traded as well. Since that time, STT has continued to develop its product line to focus on institutional and retail investors alike.
And while BLK has bumped State Street down to the No. 2 position in terms of ETF assets under management, STT is still no slouch. The firm has still nearly $370 billion tucked away inside its ETFs, and its line of Sector SPDRs remains the top choice for portfolios wanting to gain specific industry exposure. Over the last three years, STT’s nine sector SPDRs have seen a 30% compound annual growth rate in terms of asset inflows.
That, along with new products in the works — like a Beyond BRIC fund and Floating Rate Treasury fund — should help STT keep rolling in fee income for the future. Overall, management fees rose 10% for the latest quarter — primarily driven by its ETF business.