State Street Investment Management has introduced the Investments 90/10 Endowment Strategy Index ETF. This asset allocation exchange-traded fund was created in partnership with UC Investments, the investment arm of the University of California, which also provides the fund’s index. The ETF launched with a $2.5 billion seed investment from UC Investments and has been trading on NYSE Arca since September 1.
The fund is designed to track the UC Investments 90/10 Endowment Strategy Index, which offers a blend of broad U.S. equity exposure and short-duration investment-grade corporate bonds. The index allocates 90% of its weight to the S&P 500 Index, with the remaining 10% dedicated to the S&P U.S. Investment Grade Corporate Bond 1-3 Year Index, consisting of U.S. dollar-denominated, investment-grade corporate bonds maturing in one to three years.
UC Investments and S&P Dow Jones Indices developed this custom index, drawing inspiration from the institution’s $7.9 billion “Blue and Gold Endowment Pool.” This long-term public market strategy has been the top-performing product within the UC Investments portfolio since its inception seven years ago. The strategy underscores the belief held by UC Investments that diversified, liquid, and low-cost public market exposure can produce strong long-term returns while bypassing the illiquidity and complexity associated with traditional endowment models.
“At UC Investments, we are focused on building long-term, cost-effective portfolios to support our hundreds of thousands of students, faculty, staff, and alumni for generations to come,” said Jagdeep Singh Bachher, Chief Investment Officer of the University of California. “The launch of this ETF brings our institutional investment philosophy within reach of a broader investor community through the transparency, efficiency, and accessibility of the ETF structure, while staying true to the principles that have guided our investment approach,” he added.
This ETF expands upon the long-standing partnership between State Street and UC Investments. Currently, State Street Investment Management provides asset management services for the UC Investments portfolio, which exceeds $200 billion and includes pensions, endowments, and other assets, while State Street Bank and Trust Company handles custody and additional investment services.
“Our relationship with UC Investments spans more than two decades and has always been driven by innovation. With this launch, we are bringing an endowment-inspired strategy to a much broader range of investors with the low cost and transparency that make ETFs so powerful,” said Ronald O’Hanley, Chairman and CEO of State Street Corporation.
“This collaboration demonstrates what can be achieved when a leading asset owner and asset manager work together to turn a successful institutional investment strategy into an accessible solution for investors,” said Yie-Hsin Hung, President and CEO of State Street Investment Management. “It reflects our commitment to helping clients expand their investment priorities into new markets and investor communities.”
