State Street Global Advisors (SSGA), the asset management business of State Street Corporation (NYSE: STT), today announced the expansion of its smart beta solutions with a new fixed income smart beta strategy that aims to capture maximum returns in the current climate of rising rates and increased fixed income volatility. SSGA’s fixed income smart beta strategies give institutional investors more control over their investment objectives by moving beyond traditionally weighted benchmarks and generating results through exposure to credit, term or liquidity factor premia.
“Our fixed income strategy has evolved from a one-factor screen to a multi-factor framework featuring research based factor definitions, dynamic weighting and continuous portfolio reweighting as factor exposures change,” said Lori Heinel, deputy chief investment officer and chief portfolio strategist at State Street Global Advisors. “SSGA’s fixed income smart beta solution can both improve returns and decrease volatility by isolating factors with greater precision.”
While smart beta has been employed for decades with equities to pursue better risk-adjusted returns, investors have been slower to adopt these strategies on the fixed income side. However, results from smart beta strategies have proven to be even stronger for fixed income, as neither a passive or active approach achieves fixed income investment objectives. As fixed income investors are typically positioned around duration, credit, term, and liquidity in every investment, factor based investing is a natural fit for fixed income.
“SSGA has a history in identifying the systematic sources of variation in fixed income returns; and its large size and scale makes it well positioned to capture returns in a cost efficient, transparent way,” said Ritirupa Samanta, managing director, global head of systematic fixed income at State Street Global Advisors. “Our market leading position managing $350 billion in passive global fixed income also allows for the management of investments through constrained liquidity and issuance environments, two of the biggest challenges of investing in fixed income.”
State Street Global Advisors has been providing smart beta strategies to help clients maximize returns in challenging economic conditions for more than 20 years. With a range of more than 100 smart beta offerings, SSGA is a pioneer in smart beta and factor investing solutions. For more information on SSGA’s Fixed Income Smart Beta solutions, visit http://smartbeta.ssga.com/