etf

State Street to Launch First Global ETF

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Ending Barclays short-lived hegemony in style-based exchange-traded funds (ETFs) and launching the first global ETF, State Street Global Advisors announced the opening of 7 new funds. Continuing its surge into the ETF market, State Street was scheduled to launch a variety of growth, value, and sector funds, as well as the first global ETF on Friday, September 28, 2000.


Dow Jones Indexes, a part of Dow Jones & Company, announced that the new family of ETFs would be launched tomorrow on the American Stock Exchange. Called StreetTRACKS, the new ETFs will be linked to Dow Jones Index and Morgan Stanley Index families, including:
  • Dow Jones Global Titans Index
  • Dow Jones U.S. Large Cap Growth Index
  • Dow Jones U.S. Large Cap Value Index
  • Dow Jones U.S. Small Cap Growth Index
  • Dow Jones U.S. Small Cap Value Index
  • Morgan Stanley High Tech 35 Index
  • Morgan Stanley Internet Index

"State Street Global Advisors has the distinction of launching the first ETF based on a global index [Dow Jones Global Titans Index]," said David Moran, President of Dow Jones Indexes.

The Dow Jones Global Titans index was launched in July of 1999 and currently has 21 licensees with assets approaching $2 billion, according to Dow Jones Indexes. The State Street offering, however, will attract the first exchange-traded fund cash to the index.

Dow Jones Global Titans Index Holdings as of Friday, March 24, 2000

Company Country Close Shares US $ % Chg Market Cap Weight
Microsoft Corp. USA
111.688
5204852
-0.17
581.32
8.5
General Electric Co. USA
159.063
3277652
-0.2
521.35
7.62
Intel Corp. USA
139.063
3340999
-2.5
464.61
6.79
Exxon Mobil Corp. USA
77.25
3461574
2.32
267.41
3.91
Deutsche Telecom AG Ger
89.4
3029604
5.88
264.75
3.87
Wal-Mart Stores Inc. USA
55.188
4453740
2.2
245.79
3.59
International Business Machines Corp. USA
121
1802604
5.27
218.12
3.19
Lucent Technologies Inc. USA
64.5
3187478
-0.67
205.59
3.01
Citigroup Inc. USA
60.5
3371665
-2.12
203.99
2.98
France Telecom Fra
191
1024615
5.07
191.3
2.8
AT&T Corp. USA
58.813
3195043
2.73
187.91
2.75
Toyota Motor Jap
5110
3760650
3.73
179.89
2.63
BP Amoco UK
5.415
19486680
1.76
168.37
2.46
American International Group Inc. USA
107.625
1548241
3.18
166.63
2.44
SBC Communications USA
43.063
3411379
-1.15
146.9
2.15
Merck & Co. USA
61.75
2337422
-1.79
144.34
2.11
Hewlett-Packard Co. USA
142.375
1001493
-3.31
142.59
2.08
British Telecommunications UK
12.64
6506713
2.82
131.23
1.92
Royal Dutch Petroleum Swi
59
2144296
1.7
123.67
1.81
MCI Worldcom Inc. USA
42.672
2838345
-0.62
121.12
1.77
Coca-Cola Co., The USA
47
2469980
-1.31
116.09
1.7
Morgan Stanley,Dean Witter & Co. USA
95.813
1136881
1.12
108.93
1.59
Hsbc Holdings UK
7.725
8458658
4.75
104.27
1.52
Allianz AG Ger
418.5
245270
3.26
100.34
1.47
Johnson & Johnson USA
71.25
1391649
-10.94
99.15
1.45
Novartis AG (Namen) Swi
2188
72130
2.7
97.22
1.42
Siemens AG Ger
165.3
594841
5.15
96.11
1.4
Bank of America Corp. USA
54.438
1707184
0.46
92.93
1.36
Bell Atlantic Corp. USA
59.5
1552786
-0.21
92.39
1.35
Disney (Walt) Co. USA
41.5
2069931
-0.3
85.9
1.26
BellSouth Corp. USA
44.688
1881844
0.85
84.09
1.23
Roche Hldg AG (Drc) Swi
19310
7026
1.18
83.57
1.22
Chase Manhattan Corp. USA
96.188
824777
-2.35
79.33
1.16
Nestle SA (Namen) Swi
2989
40352
2.73
74.3
1.09
Procter & Gamble Co. USA
56.438
1315714
0.56
74.26
1.09
DaimlerChrysler AG Ger
70.2
1013733
3.45
69.56
1.02
Bank of Tokyo-Mitsubishi Ltd. Jap
1441
4675455
2.12
63.07
0.92
Lloyds TSB Group Plc UK
6.65
5475337
5.79
58.1
0.85
Du Pont (E.I.) De Nemours & Co. USA
54.813
1052473
-0.11
57.69
0.84
UBS Swi
431.5
215289
2.69
57.22
0.84
Chevron Corp. USA
85.625
656266
1.18
56.19
0.82
Credit Suisse Group (Namen) Swi
331
273838
3.9
55.83
0.82
ING Groep N.V. Net
56.79
996677
0.32
55.33
0.81
General Motors Corp. USA
85.375
640208
-1.87
54.66
0.8
Ford Motor Co. USA
44.688
1137033
0.42
50.81
0.74
AXA Fra
144.6
356336
-0.97
50.37
0.74
Morris (Philip) Cos. USA
19.813
2314476
1.28
45.86
0.67
ENI Ita
5.02
8002128
0.47
39.27
0.57
Boeing Co., The USA
36
934540
2.49
33.64
0.49
Unilever Nv (cva Ntfl4) Net
48.78
571576
1.78
27.25
0.4

Source: Dow Jones & Company

 


                                           Source: Dow Jones & Company

The new ETF to be launched tomorrow based on the Dow Jones Global Titans Index could be particularly appealing to investors who wish to achieve global diversification, since the index has a limited number of holdings, high liquidity, and low component turnover.

"Since bringing the first ETF to market back in 1993, we have guided this burgeoning market in its evolution," said Timothy B. Harbert, President of State Street Global Advisors. "We have been pragmatic in our selection of funds and feel that the indices on which they are based are best-suited to meet the demands of investors."

State Street officials announced they would continue to evaluate the demand in the marketplace and look to possibly add further ETFs under this series. Additionally, SSgA announced that tomorrow it will be launching a new website devoted to the new ETFs, www.streetracks.com, for information including ordering or downloading prospectuses, index & fund fact sheets, and questions and answers.

Interestingly, the new Dow Jones style indexes were actually constructed by State Street about 15 years ago and sold to Dow, so that they could aggressively market them and build the brand value. State Street and Dow claim that the growth and value indexes are much better than the Russell/Barra combination used by Barclays iShares, because they have lower turnover and are more tax efficient.

As State Street ETF principal Gus Fleites, never one to be shy about taking a shot at Barclays noted, "I think you'll find that one of the biggest concerns investors have with the indexes that are out there right now is that they have significant turnover."

Fleites, whose remarks appeared in an exclusive IndexFunds article, was unavailable for further comment, as he is in New York with other State Street executives to ring the bell tomorrow at the American Stock Exchange (AMEX)