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State Street, Nuveen To Enhance Municipal Bond ETF Capabilities

State Street Global Advisors (SSgA), the investment management business of State Street, has entered into an agreement with Nuveen Investments, under which Nuveen will become sub-adviser for municipal bond SPDR exchange traded funds (ETFs) along with other municipal bond investment strategies managed by State Street Global Advisors.

Under the terms of the agreement, Nuveen Asset Management will be responsible for managing the assets of five existing municipal bond SPDR ETFs under oversight of SSgA Funds Management (SSgA FM) and the board of trustees for each SPDR ETF.

SSgA FM will continue to serve as the investment adviser for the municipal bond SPDR ETFs. With nearly $2bn in assets, SSgA’s municipal bond ETFs will be re-branded as SPDR Nuveen municipal ETFs. The sub-advisory agreement, which has been approved by the board of trustees and shareholders for each SPDR ETF, will become effective on April 1, 2010.

To ensure a smooth transition, Tim Ryan, lead portfolio manager of the municipal bond SPDR ETFs and a unit head for State Street Global Advisors’ municipal bond group, will transition to Nuveen Asset Management as senior vice president.

Jim Ross, senior managing director at State Street Global Advisors, said: “Bringing together Nuveen’s extensive experience in managing municipal bond portfolios with State Street’s leadership in exchange traded funds creates an unmatched offering in municipal bond portfolios.”

Bill Huffman, chief operating officer and co-head of Nuveen Asset Management, said: “We are pleased to be teaming up with State Street, the firm that created the first exchange traded fund, to provide investors and investment professionals with precise investment products that combine the advantages of municipal bonds and ETFs. The synergies created by this partnership will benefit investors and create exciting new opportunities for collaboration.”

Anthony Rochte, senior managing director at State Street Global Advisors, said: “Through this arrangement, investors will benefit from the combined intellectual capital of Nuveen and State Street Global Advisors, a value proposition that positions our very successful family of municipal bond SPDR ETFs for continued growth.”

Nuveen Investments is a global provider of investment services to institutions and high-net-worth investors.