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Ciaran Fitzpatrick, State Street Fund Services
Ciaran Fitzpatrick, State Street Fund Services

Building strategic partnerships with the ETF ecosystem

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State Street Fund Services | Best ETF Custodian | Best ETF Back Office Tech Provider | Best ETF Middle Office Tech Provider | Best Overall ETF Administrator | Best ETF Administrator – Equity ETFs | Best ETF Administrator – Fixed Income ETFs

Q&A with Ciarán Fitzpatrick, Managing Director, Head of ETF Solutions, State Street Global Services, ETF Servicing

Why do you think you won this award?

Our key focus at State Street is building strategic partnerships with our clients and all members of the ETF ecosystem. We aim to be the best partner, innovator, operator and have the best talent across the industry. As part of this process we focus on people, technology and experience to keep us ahead of our competitors. The European ETF servicing segment is getting increasing more competitive with service providers and custodians looking to expand their capabilities to cater for the complexities of ETFs. We welcome this competition as is drives us to continue to invest in our people and technology and expanding partnerships would existing and new asset managers across Europe.

In the past six months we have successfully expanded our strategic partnerships with two new entrants to the European ETF market and demonstrated our rich history and abilities to facilitate our clients getting to market with an operating model utilising best practice solutions.

We never take our clients and industry partners for granted and continually strive to improve our service offering. Winning these prestigious awards which are voted by our peers in the ETF industry is great recognition that our hard work is paying off and we are extremely proud to win these awards.

What is the size and scale of your business at the moment?

We are currently servicing over USD950 billion of ETF assets across Europe representing over 65 per cent of the overall European ETF market. We have a really strong client base with different ETF strategies leveraging our operating and thought leadership strengths to help grow their business. At State Street we have partnered with global giants as well as new start ups in the ETF ecosystem to support their growth and success in Europe. Our proven infrastructure and depth of experience of over 25 years in servicing ETFs gives confidence to asset managers that State Street can provide best practice solutions for their products

What trends have you seen over the past year?

In the past 12 months we have seen a continued growth in the range of ESG ETF solutions entering the market with over 60 per cent over inflows into European ETFs being aligned to ESG products. This is being driven by regulation such as SFDR and also to a change in the strategies and of investors across the continent.

We are also seeing a significant increase in the number of traditional mutual fund managers entering the European ETF space with active strategies mirroring their successful mutual funds. An active strategy allows the asset manager to adjust the portfolio intraday to account for market events as opposed to waiting for the index to adjust its positions which is the case for pure passive ETF strategies.

Where do you see the ETF industry going in terms of products over the coming year?

In the coming year we believe there will be more entrants from the traditional mutual fund space into the ETF arena. This will be driven by the continued trend of investment moving from traditional active mutual funds to ETF strategies.

There is also an increased focus by ETF issuers towards targeting retail investors which is a somewhat untapped market in Europe. We are seeing ETF issuers partner with platforms to build savings plans constructed of ETFs and also model portfolios which contain a range of ETFs. This is an area that drives the majority of ETF investment in the US whereas institutional investors make up the lions share of the European ETF investor base.

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