State Street Global Advisors has launched two actively-managed, sector rotation SPDR ETFs with tactical allocation strategies.
The SPDR SSGA US Sector Rotation ETF (XLSR) and SPDR SSGA Fixed Income Sector Rotation ETF (FISR) are managed by the firm’s Investment Solutions Group (ISG). ISG is comprised of more than 75 strategists, analysts and portfolio managers overseeing more than USD266 billion in assets for investors including the world’s leading central banks, sovereign wealth funds and pension funds.
“These two new active ETFs highlight three key qualities of State Street Global Advisors – the power of ISG’s sophisticated tactical asset allocation, the world’s largest and most liquid suite of equity sector ETFs, and our experience in managing over $400 billion in fixed income assets,” says Noel Archard, Global Head of SPDR Product at State Street Global Advisors. “In bringing these attributes to a wider audience through our SPDR ETF family, we are providing clients with alpha-seeking solutions to enhance core portfolios.”
The SPDR SSGA US Sector Rotation ETF seeks to provide capital appreciation by overweighting or underweighting S&P 500 Sector ETFs based on ISG’s sector return forecasts and research, which includes a proprietary, quantitative sector selection model. ISG uses the model results and applies qualitative judgment to construct a portfolio of sector ETFs that seeks to maximise returns while meeting risk targets.
The SPDR SSGA Fixed Income Sector Rotation ETF seeks to provide total return by tactically allocating across income and yield-generating ETFs across the fixed income spectrum. FISR uses a tactical investment strategy based on ISG’s Fixed Income Sector Rotation Model, followed by fundamental review by the portfolio management team. The model provides views on the direction of rates and spreads across the maturity and credit quality spectrums.
“Sectors have long demonstrated consistent sensitivity to economic and interest rate cycles,” says Dan Farley, CIO of State Street Global Advisors’ Investment Solutions Group. “Our sector selection models provide a unique opportunity to generate meaningful active performance for clients in varying market conditions.”
