State Street Global Advisors (SSGA) has a long history in the area of exchange-traded funds (ETFs), having been one of the first companies to launch one in 1993. SSgA currently holds the industry’s largest ETF in terms of assets and runs more than 100 distinct ETFs, tracking strategies including U.S. equity market capitalization and style, sector and industry, international equity, commodities, and many more.
Twice a year SSgA presents United States investment professionals in ETF outlook for the road ahead. This site begins to summarize this outlook for 2020—and offers investors and advisors a series of informative new whitepapers. These documents and the ongoing updates for those who register with us will help provide guidance that can help investors “thread the needle” in 2020 and beyond.
At State Street Global Advisors (SSGA) our mission is to invest responsibly to enable economic prosperity and social progress.
As the asset management arm of State Street Corporation, we are the creator of the world’s first ETFs and an indexing pioneer. Over the past 40 years we have built a universe of active and index strategies across asset classes to help our clients, and those who rely on them, achieve their investment goals.
Our leadership team is backed by more than 500 market cycle-tested investment professionals.
Whether it is pioneering low-cost index investing, creating the first US exchange traded fund (ETF) or being an early leader in active quantitative investing, our clients' investing challenges have been the catalyst of our innovation for over 40 years.
State Street works with clients to understand their unique needs and objectives, and applies our disciplined, rigorous, research-based approach to help them meet a wide range of investment goals.
Michael Arone, CFA
Chief Investment Strategist
Michael is the Chief Investment Strategist for the SPDR® Americas Business at State Street Global Advisors. He is responsible for expanding State Street Global Advisors' footprint and thought leadership effort through frequent contributions to the financial news media, speaking engagements, and client interactions.
“Investors, politicians and central bankers have been gorging themselves on generous fiscal and monetary policies for at least the last decade. But, the underlying risks are not stable.”
Matthew Bartolini, CFA
Chief of Investment Research
Matthew is the Head of SPDR Americas Research at State Street Global Advisors. He manages a team re 44sponsible for the product research and analysis of SPDR ETFs, and the development of market outlooks, investment themes, and portfolio implementation ideas to help clients understand the market landscape and achieve their desired investment outcomes.
“Overall economic momentum is not what I would call robust. I think you need to start to bolster the defensive side of the portfolio, focusing on a low-volatility strategy.”
Rick Lacaille
Chief Investment Officer
Rick Lacaille is executive vice president and global chief investment officer (CIO) of State Street Global Advisors. He is also a member of the firm's Executive Management Group. In his role as CIO, Rick is responsible for all investment management activity at State Street Global Advisors, including research and trading.
“I think there will be a lot of noise because of the election, but I don’t think the markets will trade on that. We are going to be more interested in monetary policy and earnings growth to see if it warrants what we are paying for stocks.”
Despite the US stock benchmarks reaching all-time highs in 2019, very little about 2020 feels certain. With impeachment and its aftermath, the 2020 presidential election, critical supreme court cases, rising trade tensions, and much more—we’re likely to see more volatility than we did in previous years. This means investors’ margin for error — and opportunity — will be much more narrow and strategies for success must be far more precise.
Consumer strength is the primary reason that the US economy hasn’t succumbed to the recession seen elsewhere around the world, but this may not last. And with falling corporate profits, possible tax increases (depending on who is elected), additional tariffs scheduled for and Fed rate cuts likely on hold for a while, consumer spending may not continue at this rate.
While the experts at State Street Global Advisors (who you’ll meet here on this site) don’t believe a full-blown recession is likely, investors can and should use precise ETF strategies to “thread the needle” and achieve success in 2020.
2020 ETF Market Outlook: Threading the Needle
This guide is essential for investors who are determined to look beyond the noise, beyond the sentiment swings and focus on the fundamentals that will drive market performance over the next year. This guide will give a powerful overview of market forces we see impacting 2020 most—and how we intend to adjust our ETF positions accordingly.
As the white paper points out, the investment landscape is shifting from “tell me something good to show me something good.” Consumer strength is the primary reason that the US economy hasn’t succumbed to the recession, but the consumer might be tiring. While generally about two-thirds of the US economy is driven by personal consumption, the Bureau of Economic Analysis reported that third-quarter US GDP growth was driven completely by personal consumption. And with falling corporate profits, additional tariffs scheduled for mid-December and Fed rate cuts likely on hold for a while, it may become difficult for the consumer to shoulder this larger burden.
2020 is likely to be a year with little margin for error. Opportunities may be scarce and the markets may be even more volatile than they have been the last two years. With all the uncertainty looming, don’t stumble out of the gate. Read State Street’s “2020 ETF Market Outlook: Threading the Needle” White Paper.
Stay Invested, but Limit Downside Risk
In “Stay Invested, but Limit Downside Risks,” State Street advises investors to, “Target equities that may be impacted less by volatility. They point out that this is a different volatility regime for investors than the one they endured during the earlier stages of this still lumbering bull market. State Street guides readers to balance downside and upside with diversified multifactor strategies, add capital discipline with dividend growth strategies, and to minimize risk with pure low-volatility strategies. They also provide guidance on their Business Cycle Approach and their Technical Volatility Approach.
Actively Balance Risk in the Hunt for Yield
In the “Actively Balance Risk in the Hunt for Yield” white paper, State Street consuls investors to seek a balance between income generation, credit risk, equity risk and macro volatility by employing active strategies. Suggesting, generating sufficient levels of income within bond portfolios should be more about balancing duration, credit and geopolitical risks and less about reaching for double-digit returns again.
Position to Temper the Impact of Macro Volatility
In the “Position to Temper the Impact of Macro Volatility” white paper, State Street reminds investors that with stocks and bonds expensive, as well as susceptible to macro-induced volatility shocks, they should focus on strategies with low correlation to traditional markets. The white paper digs into why with stock and bonds reaching all-time highs, Icarus level valuations may lead to a smaller safety net. It also provides suggestions for how to navigate macro risk and the alternative assets that may provide a cushion if markets turn south.