State Street Corp. announced plans to apply its popular SPDRs, or Spiders, brand to all of its exchange-traded funds to gain traction in a crowded market.
James Ross, a senior managing director at State Street Global Advisors, said in an interview Monday that the brand consolidation began Monday and will continue in phases over the course of the year.
As part of the process, State Street rebranded 23 exchange-traded funds, including 14 that carried the streetTracks brand, as Spider funds Monday.
"I think this helps put a definition on what products are State Street products," Mr. Ross said. "We weren't concerned about ever being part of the pack. We just wanted to separate ourselves and identify that all of these are State Street products."
The term "Spiders" comes from the acronym for the first exchange-traded fund, the S&P 500 Depositary Receipt.
"We got strong feedback that the Spiders brand was well known, respected, and was viewed most positively," he said. "We are looking at this as a way to unify our brand."
The Boston company - which started the first U.S. exchange-traded fund, its SPDR Trust, in 1993 - launched an aggressive television and print advertising campaign at the beginning of the year to coincide with the rebranding, Mr. Ross said.
He would not say how much State Street is spending on the campaign, except to say it would be "substantially" more than the company spent on advertising last year.
Last month alone 15 exchange-traded funds were launched, according to data from State Street Global Advisors. Six asset managers entered the market by starting exchange-traded funds in the past year; collectively they now offer 54 such funds with $6 billion of assets under management.
"Increased competition is good for the marketplace," Mr. Ross said. "For the most part, I think, a lot of people are coming in with different takes and different products. Some of these are niche products."
Four companies dominate the market - Barclays PLC (with a market share of 59.1% as of Dec. 29), State Street (24.4%), Bank of New York Co. Inc.'s BNY Hamilton Funds (6.5%), and Vanguard Group Inc. (5.4%) - according to data from State Street Global Advisors. However, their share has diminished since the start of last year as more providers have entered the market, according to Financial Research Corp. of Boston.
Mr. Ross said he is not concerned about losing share. "Exchange-traded fund assets are continuing to flow in, and the majority of these assets are flowing into established products, even with all of the new entrants."
As of Dec. 29 there were 14 managers running 359 U.S. exchange-traded funds with about $417 billion of assets, according to State Street Global Advisors. Such assets grew about 35% last year.
At yearend State Street managed $1.6 trillion of assets, and last year its exchange-traded fund assets under management jumped 35.9%, to $101.9 billion.
State Street plans to launch several funds this year, including one based on the MSCI Barra all-country index that includes every country but the United States. The fund will be introduced this month.
