John Spence
State Street to Launch First Global ETF
John Spence
Thursday, September 28, 2000
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: "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)
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