SSgA re-brands all its ETFs under SPDR name

Jan 15, 2007 @ 12:01 am

By David Hoffman

PHILADELPHIA — State Street Global Advisors last week said that it will re-brand its exchange traded funds under one name: SPDRs.

The move is intended to bring order to Boston-based SSgA’s lineup of 46 ETFs, which are marketed under both the SPDR and streetTracks brands, according to Jim Ross, co-head of the company’s adviser services unit.

It is also intended to leverage the popularity of the SPDR S&P 500 ETF, formally SPDR Trust — the world’s first and largest ETF, with more than $63 billion in assets, he said.

“When we did the market research, the SPDR brand really stood out,” Mr. Ross said.

Extending it to all of SSgA’s ETFs, however, has many industry experts quietly chuckling, because SPDR originally stood for Standard & Poor’s Depositary Receipts.

SSgA will slap the moniker on ETFs that follow indexes not only from S&P of New York but also those developed jointly by Dow Jones Indexes of Dow Jones & Co. Inc. of New York and Wilshire Associates Inc. of Santa Monica, Calif.

Potential confusion

The company’s move has the potential to cause confusion, said Jim Lowell, the Needham, Mass.-based editor of the Forbes ETF Advisor, a monthly newsletter. But that wouldn’t necessarily be a bad thing for SSgA, he said.

“It’s the kind of confusion State Street wants,” Mr. Lowell said.

An investor confused about an ETF will ask questions about that ETF, giving SSgA an opening to make its pitch, he said.

“People probably will think anything with ‘SDPR’ attached to it is worth checking out,” Mr. Lowell said.

Index providers aren’t grousing.

“The SPDR is one of the most recognized ETF brands,” said Dave Guarino, a spokesman for Standard & Poor’s. “We’re proud to have licensed [SSgA] to broaden the brand.”

Michael A. Petronella, president of Dow Jones Indexes, said: “We respect State Street Global Advisors’ decision to consolidate their ETF house brand and their commitment to increasing the awareness of their ETF products.”

SSgA will implement the branding initiative in several phases to conclude later this year. The ticker symbols will remain unchanged.

The company will launch a website to support its ETFs and create a new ETF logo. SSgA also is launching a major advertising campaign created around a new tagline: “Precise in a world that isn’t.”

Several new ETFs also are planned for the near future, including more that invest in international stocks, Mr. Ross said.

By putting all its ETFs under one brand and supporting that brand with an aggressive marketing campaign, SSgA is taking the actions it needs to stay competitive with Barclays Global Investors of San Francisco, according to several industry experts.

At the end of last year, SSgA finished second in ETF assets ($101.9 billion) behind Barclays ($246.4 billion).

“They definitely have some catching up to do,” said Sonya Morris, editor of Morningstar ETFInvestor, a newsletter published by Morningstar Inc. of Chicago. “They face a formidable competitor in Barclays, but in a quickly growing market, I wouldn’t count them out.”

Financial advisers who use ETFs, however, said they are skeptical about how much of an impact SSgA’s branding and sales initiatives would have on demand for its funds.

Barclays has done a good job of flooding the ETF market with funds appealing to advisers, said Theodore J. Feight, president of Creative Financial Design, a financial advisory firm in Lansing, Mich. He said that Barclays has done such a good job that he is in the habit of using its ETF brand — iShares — to refer to ETFs in general.

There is no doubt that Barclays has the ear of advisers, said Oliver Tutt, a managing director with Randall Financial Group LLC of Providence, R.I. And there is little in terms of marketing that likely will change that, he said.

“I think firms spend a lot of time on marketing for ETFs,” Mr. Tutt noted. “A lot of it is a waste of time.”


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