Rules-Based Indices Package Dynamic Investment Strategies in an Index Wrapper

BOSTON--(BUSINESS WIRE)-- State Street Corporation (NYSE: STT) today announced it has developed and begun licensing a suite of rules-based investment strategies, or investable indices, for institutional investors.

“This is not smart beta or thematic investing,” said Will Kinlaw, head of research and advisory for State Street Global ExchangeSM. “These investable indices represent a new phase of dynamic investing. We’re packaging an active strategy in rules-driven index, where security weights can change dynamically as relevant factors and big data indicators evolve.”

The new range of indices, called IntelliGXSM, initially includes:

• GX Liquid Private Equity Index Series, which seek to track a portion of aggregate private equity performance by replicating private equity sector exposures in liquid public markets
• GX Inflation-Managed Index Series, which use the PriceStats® daily inflation series to tilt towards assets that can offer protection when inflation is rising, while also seeking to preserve higher yield during lower inflation scenarios
• GX Risk-Managed Index Series, which apply market fragility and turbulence indicators to adjust exposure to risk premiums, such as the broad equity market, in order to capture long-run portfolio growth while also mitigating downside risk.

“We’re essentially creating living indices that are flexible, evolving, transparent, and sensitive to new and meaningful factors,” continued Kinlaw. “Rather than an index that constantly tilts towards one particular factor, like inflation, our index will lean into inflation-protected bonds when it sees inflation going up and nominal treasury bonds when inflation is going down.”

“This is a natural next step in the evolution of indices,” said John Plansky, global head of State Street Global Exchange. “Investors are looking for different sources of alpha. We’re integrating the worlds of academic theory and financial markets, and using our unique access to new and alternative data sets, to help asset owners and asset managers design investment strategies that meet their changing portfolio needs. We’re providing the recipe with which investors can make the meal in the form of an ETF or another investable product.”

With IntelliGX, State Street designs the index, using its highly-differentiated data sets sourced internally or from its relationships with big data providers. Index specifications are then delivered to a third-party calculation agent who independently publishes index values. The licensee, or end-user asset owner or asset manager, implements the index based on the weights received in its investable product.

In addition to providing investment process transparency, IntelliGX offers liquidity and cost-efficiencies as licensees can expand their research capabilities at a variable cost.

For more information on State Street’s Investable Indices business: https://www.ssgx.com/public/investableindices/#/

About State Street Corporation

State Street Corporation (NYSE: STT) is one of the world's leading providers of financial services to institutional investors, including investment servicing, investment management and investment research and trading. With $33.10 trillion in assets under custody and administration and $2.78 trillion* in assets under management as of December 31, 2017, State Street operates in more than 100 geographic markets worldwide, including the US, Canada, Europe, the Middle East and Asia. For more information, visit State Street’s website at www.statestreet.com.

* AUM reflects approx. $35 billion (as of December 31, 2017) with respect to which State Street Global Advisors Funds Distributors, LLC (SSGA FD) serves as marketing agent; SSGA FD and State Street Global Advisors are affiliated.

Important Information

All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for decisions based on such information and it should not be relied on as such.

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State Street Corporation

Brendan Paul, +1 617-662-2903

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@StateStreet

Source: State Street Corporation

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