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Subadvisory Partnerships Expanding in ETF Arena


In an effort to break into the fast-growing exchange traded products industry, an increasing number of investment firms are partnering with established ETF providers.

Recent partnerships include State Street’s (STT) State Street Global Advisors, the second-largest U.S. ETF issuer, and asset management giant MFS Investment Management coming together on three broad market, actively managed ETFs launched earlier this month. [SSgA, MFS Launch Three New Active ETFs]

Lengthy regulatory requirements to get a new ETF off the ground have facilitated similar deals among money managers, banks and investment advisers, reports Ari Weinberg for Pensions & Investments.

SSgA has previously partnered with Nuveen and Blackstone on bond ETFs. Blackstone and SSgA came together last year to introduce the SPDR Blackstone/GSO Senior Loan ETF (SRLN) . With almost $604 million in assets under management, SRLN is one of the most successful launches of 2013 and well on its way to being one of the most successful actively managed ETFs. [2013: A Good Year to be a New ETF]

Other noteworthy ETF issuer/subadvisory partnerships include BlackRock (BLK), parent company of iShares, and Fidelity partnering on 10 sector ETFs that launched last October. “The new Fidelity ETFs were designed to complement the company’s existing set of actively managed sector mutual funds,” reports Weinberg.

As Pensions & Investments notes, the concept of money managers and related entities partnering with each other to roll out ETFs is not new. SSgA’s partnership with Nuveen dates back to 2007 and has grown to include nearly ETFs.

Invesco’s (IVZ) PowerShares unit, the fourth-largest U.S. ETF issuer, has partnered with money manager and research firm Dorsey, Wright and Associates since 2007, according to Pension & Investments.

The PowerShares/Dorsey Wright collaboration includes popular ETFs such as the PowerShares DWA Emerging Markets Momentum Portfolio (PIE) and the Powershares DWA Momentum Portfolio (PDP) . In December, PowerShares said it will shift 10 of its other ETFs to Dorsey Wright indices. [PowerShares Announces ETF Portfolio Changes]

ETF Trends editorial team contributed to this article.

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