State Street launches first active ETFs in Australia

State Street Investment Management has launched two actively managed exchange-traded funds (ETFs) in an extension of its partnership with Blackstone Credit and Insurance.

These are the first actively managed ETFs launched by either firm in Australia.

State Street Blackstone Senior Loan Active ETF (ASX: SBSL) and State Street Blackstone High Income Active ETF (ASX: SBHI) will list on the ASX on August 7.

SBSL and SBHI are feeder funds investing in the US-domiciled State Street Blackstone Senior Loan ETF (NYSE: SRLN) and State Street Blackstone High Income ETF (CBOE: HYBL). SRLN is the largest actively managed bank loan ETF, and both funds are sub-advised by Blackstone.

As the investment manager of the Australian-listed ETFs, State Street will oversee governance and distribution to intermediary and institutional investors.

"We're excited to introduce these two well-established US ETFs to Australian investors in the form of feeder funds. This launch represents an important milestone for State Street Investment Management in Australia," State Street head of intermediary client coverage in Asia Pacific Meaghan Victor said.

"We pioneered the ETF industry here 25 years ago, democratising investing and giving all investors access to institutional-grade solutions. Today, we're proud to build on that innovation by launching our first actively managed ETFs listed locally in Australia at a time when demand for active fixed income strategies is accelerating."

Victor added State Street sees active ETFs still in the early stages of their evolution which will play an increasingly important role in portfolio construction.

The two US active ETFs, SRLN and HYBL, have assets under management of US$5.2 billion and US$569 million respectively.

"SBSL is the first ETF in Australia primarily allocating to US senior loans, offering investors access to the $2.87 trillion segment of the US corporate credit market," State Street head of APAC product Flora Herries said.

"With bank hybrids being gradually phased out, many investors are seeking alternative high yield solutions. These ETFs offer attractive income opportunities by accessing the higher yielding segments of the corporate bond market."

Blackstone Credit & Insurance global head of liquid credit strategies and head of international Dan Leiter said the partnership underscores Blackstone's commitment to broadening its credit capabilities for a diverse investor base across the Asia Pacific region.

"We are pleased to partner with State Street to expand access to liquid credit in Australia, a market with deep significance to our investment history and longstanding relationships, and to introduce new products that channel our expertise across our US$125 billion global liquid credit platform," Leiter said.