State Street Files for Nasdaq 100 ETF Amidst Competition
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Source: seekingalpha
- Increased ETF Competition: State Street filed for a Nasdaq 100 ETF on Tuesday, following a similar application from BlackRock, indicating heightened competition in the ETF space, particularly against Invesco, which has long dominated this market.
- Clear Investment Strategy: The ETF aims to track the performance of 100 non-financial companies based on market capitalization, with a commitment to invest at least 80% of its net assets in securities comprising the index under normal market conditions, highlighting its focus on tech stocks.
- Nasdaq's Global Expansion: Nasdaq announced it is selectively choosing new partners to enhance the index's global exposure, reflecting its commitment to international markets, especially as demand continues to grow, potentially opening up more opportunities for ETF products.
- Stable Market Reaction: State Street's stock remained unchanged at $130.20 in premarket trading on Tuesday, while Invesco and BlackRock shares fell by 1.7% and 1.3%, respectively, indicating a cautious initial market response to the new ETF filings.
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Analyst Views on STT
Wall Street analysts forecast STT stock price to rise
12 Analyst Rating
7 Buy
4 Hold
1 Sell
Moderate Buy
Current: 130.200
Low
128.00
Averages
142.27
High
168.00
Current: 130.200
Low
128.00
Averages
142.27
High
168.00
About STT
State Street Corporation is a financial holding company. The Company, through its subsidiary, State Street Bank and Trust Company (State Street Bank), provides a range of financial products and services to institutional investors. It operates through two lines of business: Investment Servicing and Investment Management. Its Investment Servicing line of business provides a range of services and market and financing solutions to institutional clients, including mutual funds, collective investment funds and other investment pools, corporate and public retirement plans, insurance companies, investment managers, foundations and endowments worldwide. Through State Street Investment Services, State Street Markets and State Street Alpha, it offers a range of solutions, including transaction management, derivatives, collateral services, and others. Investment Management line of business provides a range of investment management solutions and products through State Street Investment Management.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
State Street Files for Nasdaq 100 ETF Amidst Competition
- Increased ETF Competition: State Street filed for a Nasdaq 100 ETF on Tuesday, following a similar application from BlackRock, indicating heightened competition in the ETF space, particularly against Invesco, which has long dominated this market.
- Clear Investment Strategy: The ETF aims to track the performance of 100 non-financial companies based on market capitalization, with a commitment to invest at least 80% of its net assets in securities comprising the index under normal market conditions, highlighting its focus on tech stocks.
- Nasdaq's Global Expansion: Nasdaq announced it is selectively choosing new partners to enhance the index's global exposure, reflecting its commitment to international markets, especially as demand continues to grow, potentially opening up more opportunities for ETF products.
- Stable Market Reaction: State Street's stock remained unchanged at $130.20 in premarket trading on Tuesday, while Invesco and BlackRock shares fell by 1.7% and 1.3%, respectively, indicating a cautious initial market response to the new ETF filings.
See More
Financial Stocks Underperform, Investors Remain Cautious
- Industry Challenges: Financial stocks have collectively dropped 8.8% over the past six months due to an unpredictable interest rate and inflation environment, significantly underperforming the S&P 500's 2.8% decline, indicating investor concerns about the sector's outlook.
- State Street's Lackluster Performance: With a market cap of $35.75 billion, State Street has seen only 3.6% annual revenue growth over the past five years, and its EPS growth of 9.1% annually falls short of the peer group average, reflecting limited growth potential compared to smaller competitors.
- Raymond James's Strong Growth: Raymond James, valued at $28.26 billion, has achieved an impressive 11.7% annual revenue growth over the last five years, bolstered by share buybacks that accelerated EPS growth, showcasing management's expertise in identifying profitable investments.
- Evercore's Market Share Gains: Evercore, with a market cap of $11.93 billion, has reported a remarkable 25.9% annual revenue growth over the last two years, with EPS increasing by 50.2% annually, indicating its success in capturing market share during the current cycle.
See More
Social Security Faces Imminent Funding Shortfall by 2032
- Funding Shortfall Warning: The Social Security trust fund is projected to run out by 2032, potentially leading to a 23% to 28% cut in benefits for approximately 75 million Americans, necessitating urgent congressional action to prevent these cuts from impacting millions of lives.
- Historical Lessons: The last major reforms in 1983 involved bipartisan legislation to restore the program's solvency, highlighting the need for lawmakers to unite again to ensure Social Security's sustainability and avoid repeating past mistakes.
- Multiple Solutions Proposed: Senator Bill Cassidy's proposal includes borrowing $1.5 trillion to create a separate investment fund aimed at enhancing the growth potential of Social Security funds through more aggressive investment strategies, although this raises concerns about associated risks.
- Tax Reform Proposal: Senator Sheldon Whitehouse's suggestion to increase Social Security taxes for individuals earning over $400,000 could extend the solvency of both Social Security and Medicare by at least 75 years, but its acceptance by both parties remains uncertain.
See More
KBWB ETF 52-Week Price Analysis
- Price Range Analysis: The KBWB ETF has a 52-week low of $51.125 and a high of $91.435, with the last trade at $77.01, indicating relative stability and volatility in the current market.
- Technical Analysis Tool: Comparing the current share price to the 200-day moving average provides investors with deeper insights for decision-making and risk management.
- ETF Trading Mechanism: ETFs trade similarly to stocks, where investors buy and sell 'units' that can be created or destroyed based on investor demand, reflecting market liquidity and demand fluctuations.
- Inflows and Outflows Monitoring: Weekly monitoring of changes in shares outstanding helps identify significant inflows (new units created) or outflows (old units destroyed), which directly impacts the ETF's underlying holdings and market performance.
See More
State Street Supports Dimensional's New ETF Structure
- Pioneering ETF Structure: State Street has been appointed as the service provider for Dimensional Fund Advisors' new ETF share class structure, which is the first of its kind in the U.S. under the SEC's new framework, marking a significant milestone in ETF innovation.
- Comprehensive Service Support: State Street will provide end-to-end services including custody, fund accounting, ETF basket creation, order management, settlement, transfer agency, and reporting, ensuring a smooth implementation of Dimensional's ETF share classes.
- Global Partnership Advantage: With a proven track record in supporting ETFs and mutual funds across Asia-Pacific, Europe, and North America, State Street ensures consistent and scalable support for Dimensional's U.S. launch, further solidifying their long-standing partnership.
- Potential Investor Benefits: Dimensional's Co-CEO Gerard O'Reilly noted that broader adoption of this share class structure could offer millions of American investors potential benefits of increased tax efficiency and cost savings from economies of scale, highlighting State Street's expertise in ETF servicing as crucial for this launch.
See More
Susan Gordon Elected to State Street Board of Directors
- New Board Member: State Street Corporation announced the election of Susan Gordon to its Board of Directors, bringing over three decades of experience in national security, intelligence, and technology, which will provide fresh perspectives and strategic direction for the company.
- Leadership in Change and Innovation: As the former Principal Deputy Director of National Intelligence, Gordon drove integration and modernization within the intelligence community, and her extensive background in cybersecurity and geopolitical risk will enhance State Street's oversight of non-market risks.
- Rich Industry Experience: With nearly 29 years at the CIA in various senior roles, she led significant organizational transformations, including the establishment of In-Q-Tel, showcasing her leadership capabilities and innovative thinking in complex organizations.
- Strategic Value Enhancement: The chairman of State Street noted that Gordon's addition will strengthen the board's oversight of systemic risks, enhancing the company's ability to respond to the rapidly changing financial landscape and ensuring alignment with regulatory requirements.
See More
State Street Files for Nasdaq 100 ETF Amidst Competition
- Increased ETF Competition: State Street filed for a Nasdaq 100 ETF on Tuesday, following a similar application from BlackRock, indicating heightened competition in the ETF space, particularly against Invesco, which has long dominated this market.
- Clear Investment Strategy: The ETF aims to track the performance of 100 non-financial companies based on market capitalization, with a commitment to invest at least 80% of its net assets in securities comprising the index under normal market conditions, highlighting its focus on tech stocks.
- Nasdaq's Global Expansion: Nasdaq announced it is selectively choosing new partners to enhance the index's global exposure, reflecting its commitment to international markets, especially as demand continues to grow, potentially opening up more opportunities for ETF products.
- Stable Market Reaction: State Street's stock remained unchanged at $130.20 in premarket trading on Tuesday, while Invesco and BlackRock shares fell by 1.7% and 1.3%, respectively, indicating a cautious initial market response to the new ETF filings.
See More
Financial Stocks Underperform, Investors Remain Cautious
- Industry Challenges: Financial stocks have collectively dropped 8.8% over the past six months due to an unpredictable interest rate and inflation environment, significantly underperforming the S&P 500's 2.8% decline, indicating investor concerns about the sector's outlook.
- State Street's Lackluster Performance: With a market cap of $35.75 billion, State Street has seen only 3.6% annual revenue growth over the past five years, and its EPS growth of 9.1% annually falls short of the peer group average, reflecting limited growth potential compared to smaller competitors.
- Raymond James's Strong Growth: Raymond James, valued at $28.26 billion, has achieved an impressive 11.7% annual revenue growth over the last five years, bolstered by share buybacks that accelerated EPS growth, showcasing management's expertise in identifying profitable investments.
- Evercore's Market Share Gains: Evercore, with a market cap of $11.93 billion, has reported a remarkable 25.9% annual revenue growth over the last two years, with EPS increasing by 50.2% annually, indicating its success in capturing market share during the current cycle.
See More
Social Security Faces Imminent Funding Shortfall by 2032
- Funding Shortfall Warning: The Social Security trust fund is projected to run out by 2032, potentially leading to a 23% to 28% cut in benefits for approximately 75 million Americans, necessitating urgent congressional action to prevent these cuts from impacting millions of lives.
- Historical Lessons: The last major reforms in 1983 involved bipartisan legislation to restore the program's solvency, highlighting the need for lawmakers to unite again to ensure Social Security's sustainability and avoid repeating past mistakes.
- Multiple Solutions Proposed: Senator Bill Cassidy's proposal includes borrowing $1.5 trillion to create a separate investment fund aimed at enhancing the growth potential of Social Security funds through more aggressive investment strategies, although this raises concerns about associated risks.
- Tax Reform Proposal: Senator Sheldon Whitehouse's suggestion to increase Social Security taxes for individuals earning over $400,000 could extend the solvency of both Social Security and Medicare by at least 75 years, but its acceptance by both parties remains uncertain.
See More
KBWB ETF 52-Week Price Analysis
- Price Range Analysis: The KBWB ETF has a 52-week low of $51.125 and a high of $91.435, with the last trade at $77.01, indicating relative stability and volatility in the current market.
- Technical Analysis Tool: Comparing the current share price to the 200-day moving average provides investors with deeper insights for decision-making and risk management.
- ETF Trading Mechanism: ETFs trade similarly to stocks, where investors buy and sell 'units' that can be created or destroyed based on investor demand, reflecting market liquidity and demand fluctuations.
- Inflows and Outflows Monitoring: Weekly monitoring of changes in shares outstanding helps identify significant inflows (new units created) or outflows (old units destroyed), which directly impacts the ETF's underlying holdings and market performance.
See More
State Street Supports Dimensional's New ETF Structure
- Pioneering ETF Structure: State Street has been appointed as the service provider for Dimensional Fund Advisors' new ETF share class structure, which is the first of its kind in the U.S. under the SEC's new framework, marking a significant milestone in ETF innovation.
- Comprehensive Service Support: State Street will provide end-to-end services including custody, fund accounting, ETF basket creation, order management, settlement, transfer agency, and reporting, ensuring a smooth implementation of Dimensional's ETF share classes.
- Global Partnership Advantage: With a proven track record in supporting ETFs and mutual funds across Asia-Pacific, Europe, and North America, State Street ensures consistent and scalable support for Dimensional's U.S. launch, further solidifying their long-standing partnership.
- Potential Investor Benefits: Dimensional's Co-CEO Gerard O'Reilly noted that broader adoption of this share class structure could offer millions of American investors potential benefits of increased tax efficiency and cost savings from economies of scale, highlighting State Street's expertise in ETF servicing as crucial for this launch.
See More
Susan Gordon Elected to State Street Board of Directors
- New Board Member: State Street Corporation announced the election of Susan Gordon to its Board of Directors, bringing over three decades of experience in national security, intelligence, and technology, which will provide fresh perspectives and strategic direction for the company.
- Leadership in Change and Innovation: As the former Principal Deputy Director of National Intelligence, Gordon drove integration and modernization within the intelligence community, and her extensive background in cybersecurity and geopolitical risk will enhance State Street's oversight of non-market risks.
- Rich Industry Experience: With nearly 29 years at the CIA in various senior roles, she led significant organizational transformations, including the establishment of In-Q-Tel, showcasing her leadership capabilities and innovative thinking in complex organizations.
- Strategic Value Enhancement: The chairman of State Street noted that Gordon's addition will strengthen the board's oversight of systemic risks, enhancing the company's ability to respond to the rapidly changing financial landscape and ensuring alignment with regulatory requirements.
See More
