Nuveen jumps into ETF market

Nuveen hopes this type of arrangement is just the first of many as it hopes to subadvise more muni bond ETFs
JUL 29, 2010
Nuveen Investments LLC is breaking into the exchange-traded-fund arena through a partnership with State Street Global Advisors. Starting April 1, Nuveen will subadvise SSgA's five municipal bond exchange-traded funds. Under the exclusive arrangement, SSgA Funds Management Inc. will remain the adviser for the municipal bond SPDR ETFs, but the funds' portfolio manager, Tim Ryan, will join Nuveen. Given the amount of flows going into muni bond ETFs, SSgA wanted to tap Nuveen's municipal bond expertise, said Anthony Rochte, senior managing director with SSgA. “In addition to managing the day-to-day products, we can also pick up the research on municipal bonds which Nuveen does so well,” Mr. Rochte said. The five SPDR ETFs picked up $1.1 billion in assets in 2009, and currently have a total of $2 billion. Nuveen hopes this type of arrangement is just the first of many as it hopes to subadvise more muni bond ETFs, said Bill Huffman, chief operating officer and co-head of Nuveen Asset Management. “With the potential for higher taxes, and the tax-exempt nature of municipal bonds, we wanted to add another wrapper for these products,” Mr. Huffman said. “We will look to do other products as they relate to municipal bonds.” As a result of the arrangement, Nuveen is opening a Boston office, where Mr. Ryan will work, Mr. Huffman said. The firm has not yet decided if it will be hiring additional staff for that office.

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