Outsourced Trading Improved 83% of Asset Managers’ and Asset Owners’ Investment Performance, According to State Street’s Global Outsourced Trading Market and Outlook Survey
30 May 2024 - 12:15AM
Business Wire
State Street Corporation (NYSE: STT) today released important
findings from the firm’s most recent research survey that can be
found in a new report, The Outsourced Trading Advantage:
Evidence from Early Adopters. The report explores the
perceptions and the benefits of outsourced trading, including the
experience with outsourced trading providers and future plans.
The survey reveals compelling benefits for those outsourcing
some aspect of their trading and its potential to enhance
investment performance. Notably, the vast majority of current
users, some 85% of respondents from North America and 86% from
Europe, report improvements in their investment performance through
outsourced trading.
The State Street survey is believed to be the largest and most
comprehensive of its kind in the industry with approximately 300
asset managers and asset owners from North America, EMEA, the UK,
and APAC with AUM from under $30 billion to more than $50
billion.
Through the acquisition of CF Global Trading in February, State
Street was able to add significant scale and expertise to the
firm’s existing outsourced trading solutions. The firm delivers an
enhanced offering to clients across several asset types including
foreign exchange, fixed income, equities, exchanged traded
derivatives; and supports clients in all major regions with trading
desks in Boston, New York, Toronto, London, Lisbon, Hong Kong, and
Sydney.
“We have long believed that providing excellent service starts
with knowing our market better than anyone else. With this
ground-breaking research, we hope to shed light on the emerging
move towards outsourced trading and provide clarity regarding the
significant benefits it can offer,” said Dan Morgan, head of
Portfolio Solutions, State Street. “We are pleased that our
expertise has been enhanced with the addition of the CF Global
Trading team, now helping us deliver stronger offerings and
services to clients.”
Additional key takeaways and findings from the survey
include:
- Current users of outsourced trading consistently report
benefits such as increased efficiencies (reported by 55% of current
users), reduced costs (reported by 33%), and improved investment
performance (more than 80% reported improved investment performance
to some degree).
- Among these early adopters, who report clear and tangible
benefits, satisfaction is very high with 79% saying they are either
‘satisfied’ or ‘very satisfied’. This rises to 83% in EMEA and 81%
among very large funds (those with AUM over $50 billion).
- Potential users have different views and reservations about
outsourced trading compared with actual users. Potential users are
most concerned about cost effectiveness (61%), loss of control over
trading activities (56%), and a lack of understanding about the
benefits of outsourced trading (56%).
- Flexibility, customization, and technical integration
capabilities are key attributes sought in outsourced trading
partners. Users view their outsourced trading providers as
strategic partners to the business, extending beyond mere
transactional support to contribute to the overall efficiency and
performance of investment operations.
“The findings from this survey highlight the potential and the
real value outsourced trading is bringing to the industry, and we
are well-equipped to help clients understand the offering and help
with the integration,” said Scott Chace, co-founder of CF Global
Trading and head of Trading for Portfolio Solutions at State
Street.
Please click here to view the complete survey, and here to learn
more about State Street's Outsourced Trading capabilities.
About State Street Corporation
State Street Corporation (NYSE: STT) is one of the world's
leading providers of financial services to institutional investors
including investment servicing, investment management and
investment research and trading. With $43.9 trillion in assets
under custody and/or administration and $4.3 trillion* in assets
under management as of March 31, 2024, State Street operates
globally in more than 100 geographic markets and employs
approximately 46,000 worldwide. For more information, visit State
Street's website at www.statestreet.com.
* Assets under management as of March 31, 2024 includes
approximately $66 billion of assets with respect to SPDR® products
for which State Street Global Advisors Funds Distributors, LLC
(SSGA FD) acts solely as the marketing agent. SSGA FD and State
Street Global Advisors are affiliated.
© 2024 State Street Corporation
6651800.1.1.GBL.RTL
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Media Contact: Brendan Paul +1 (401) 644-9182
bpaul2@statestreet.com
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