State Street Risk-Based ETF Model Portfolios now accessible through Netwealth
Kathleen Gallagher
State Street Global Advisors, the asset management arm of State Street Corporation (NYSE: STT),has announced the inclusion of the State Street Risk-Based ETF Model Portfolios on the Netwealth Super and Wealth Accelerator.
This expands the availability of the State Street Risk-Based ETF Model Portfolios – Moderate, Balanced and Growth – to Australian financial advisers using the Netwealth platform.
The State Street Risk-Based ETF Model Portfolios, employ an open architecture investment structure, meaning financial advisers, on behalf of their investors, can select a portfolio of ETFs which not only cover a range of sectors and asset classes but also invest in a range of ETFs from multiple product issuers.
Model portfolios are a collection of assets that can be attributed to an investor’s portfolio and continually managed by professional investment managers, where teams of experienced investment professionals can assist advisers to serve existing clients and attract new business more effectively.
State Street Global Advisors officially launched its ETF Model Portfolio capability in the Australian market in 2019. It now ranks among the top 20 most used investment managers by advisers who currently use managed accounts.[1]
According to the Investment Trends 2024 Managed Accounts Report, the proportion of Australian financial advisers using managed accounts has more than tripled from 18% a decade ago to currently a record high of 56%.[1]
And a further 19% of advisers are potential users, taking the total possible reach in coming years to potential 75%, making managed accounts the pre-eminent solution for financial advisers.1
As a result, funds under management in managed accounts have surged by 146% in five years to exceed $194.85 billion.[2]
Further, the State Street Risk-Based ETF Model Portfolios are offered on platforms as separately managed account (SMAs). This remains the most widely used structure to implement managed accounts, with 80% of advisers implementing managed accounts with an SMA on platform.[1]
“Since launching our ETF model portfolios in 2019, uptake has been strong. Many financial advisers appreciate model portfolios for their time saving, allowing for improved engagement of existing and new clients as well as the appropriate investment structure to implement a core-satellite investment strategy,” said Kathleen Gallagher, State Street Global Advisors’ Head of SPDR ETFs Australia and Head of Model Portfolios EMEA and APAC.
“A key factor that differentiates State Street Risk-Based ETF Model Portfolios from competitors is the inclusion of smart beta in the global allocation, which supports additional capital growth while maintaining traditional risk tolerances.
“In other words, our risk-based portfolios are not your traditional 60/40, or 70/30 allocation – they are skewed towards growth while maintaining the same level of risk as traditional risk profile portfolios.
“In addition, we believe the transparent and open architecture nature of our models, will further support advisers to achieve the desirable outcomes for their clients.
“An open architecture investment structure means that ETFs from a range of providers have been considered to ensure portfolio investment selection is not limited by sector, asset class or product issuer.”
Netwealth is a specialist investment and super platform for financial advisers and wealth professionals designed to help manage their clients’ investment and superannuation portfolios..
Netwealth is used by more than 3,500 financial advisers, with more than $84.7 billion in funds under administration.[3]
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