Outsourced Trading Improved 83% of Asset Managers’ and Asset Owners’ Investment Performance, According to State Street’s Global Outsourced Trading Market and Outlook Survey

Rhea-AI Summary

State Street (NYSE: STT) has unveiled findings from its latest survey, The Outsourced Trading Advantage: Evidence from Early Adopters. The survey, which included around 300 asset managers and owners from North America, EMEA, the UK, and APAC, highlights the benefits of outsourced trading. A striking 85% of North American and 86% of European respondents report improved investment performance due to outsourced trading. Additional advantages noted include increased efficiencies (55%), reduced costs (33%), and high satisfaction rates (79%). The acquisition of CF Global Trading has bolstered State Street's expertise and scale in this area, enhancing their client offerings across multiple asset types globally.

Positive

• 85% of North American and 86% of European respondents report improved investment performance through outsourced trading.
• 55% of current users report increased efficiencies.
• 33% of current users report reduced costs.
• 79% of current users are satisfied or very satisfied, rising to 83% in EMEA and 81% among very large funds.
• The acquisition of CF Global Trading enhances State Street's expertise and scale in outsourced trading.
• Clients benefit from enhanced offerings across various asset types including foreign exchange, fixed income, and equities.
• State Street supports clients in all major regions with trading desks in Boston, New York, Toronto, London, Lisbon, Hong Kong, and Sydney.

Negative

• Potential users express significant concerns about cost effectiveness (61%), loss of control over trading activities (56%), and a lack of understanding of the benefits (56%).

BOSTON--(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

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View source version on businesswire.com: https://www.businesswire.com/news/home/20240529212975/en/

Media Contact:

Brendan Paul

+1 (401) 644-9182

bpaul2@statestreet.com

Source: State Street Corporation

FAQ

What are the benefits of outsourced trading for asset managers and owners according to State Street?

The benefits include improved investment performance, increased efficiencies, and reduced costs.

What percentage of asset managers in North America report improved performance due to outsourced trading?

85% of asset managers in North America report improved performance.

What are the key concerns of potential users regarding outsourced trading?

Key concerns include cost effectiveness, loss of control over trading activities, and a lack of understanding of the benefits.

How has State Street enhanced its outsourced trading capabilities?

Through the acquisition of CF Global Trading, which added significant scale and expertise.

Which regions are supported by State Street's trading desks?

State Street's trading desks support clients in Boston, New York, Toronto, London, Lisbon, Hong Kong, and Sydney.

What satisfaction rate do users of outsourced trading report?

79% of users report being satisfied or very satisfied with outsourced trading.