State Street entices younger investors with ‘high growth’ ETF

State Street Global Advisors (SSGA) will offer a new ‘high growth’ investment option on its Risk-Based ETF Model Portfolios in an effort to attract a younger cohort of investors.

The high growth option delivers an 89% allocation to growth assets, with an 11% allocation to defensive assets.

SSGA managing director and head of ETF model portfolios in EMEA and APAC, Kathleen Gallagher said the new high-growth option is being offered in response to adviser demand for a cost-effective portfolio for clients in their accumulation phase.

“With an estimated $3.5 trillion inter-generation transfer of wealth underway in Australia, advisers are seeking solutions to service a client base which tends to be younger, have a longer investment horizon and a higher risk tolerance,” Gallagher said. 

The High Growth model will be available to financial advisers on the Praemium, Hub24 and Netwealth platforms this month.

The broader Risk-Based ETF Model Portfolios – which include ‘moderate’ (52.5% growth assets), ‘balanced’ (65.0% growth assets), and ‘growth’ (77.5% growth assets) options –“employ a strategic asset allocation framework focusing on risk tolerances and long-term return expectations, while managing exposure to risk in a cost-efficient way through ETFs,” said, Benjamin Regnat SSGA’s APAC ex Japan head of investment solutions group.

“Our process considers ETFs from all providers to ensure portfolio investment selection is not limited by sector, asset class or product issuer.”

SSGA launched its ETF Model Portfolio capability in the Australian market in 2019.

The State Street Risk-Based ETF Model Portfolios are also offered on platforms as separately managed accounts (SMAs). According to SSGA, citing Investment Trends data, this remains the most widely used structure to implement managed accounts, with 80% of advisers implementing managed accounts with an SMA on platform.

The ETF Model Portfolios are designed, built and managed by State Street Global Advisors’ Investment Solutions Group, a team established over thirty years ago and with more than US$392 billion in assets under management and assets under advisory/consulting.

Model portfolios are a collection of assets that can be attributed to an investor’s portfolio and continually managed by professional investment managers, assisting advisers “to serve existing clients and attract new business more effectively”, SSGA notes.

State Street manages more than US$4.5 billion in ETF Model Portfolios assets worldwide.