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Money Management

SSGA’s assets up 2% for quarter despite $28 billion in outflows

SSgA

State Street Global Advisors reported $2.606 trillion in assets under management as of June 30, up 1.8% from three months earlier and up 13.3% from a year earlier, parent company State Street Corp. (STT)'s earnings release said Wednesday.

SSGA reported total net outflows of $28 billion during the second quarter, compared to net outflows of $11 billion during the first quarter and net outflows of $35 billion during the second quarter of 2016. Of the outflows, $24 billion came from equities, $6 billion from alternatives, $3 billion from multiasset-class solutions and $2 billion from cash. The outflows were partially offset by net inflows of $7 billion into fixed income.

Institutional net outflows were $22 billion, compared to net outflows of $26 billion for the first quarter and net outflows of $33 billion for the second quarter of 2016. The institutional outflows were driven by $15 billion from equities, $7 billion from alternative investments and $3 billion from multiasset-class solutions, partially offset by net inflows of $3 billion into fixed income.

Exchange-traded funds experienced net outflows of $4 billion for the quarter, vs. net inflows of $12 billion for the previous quarter and net outflows of $3 billion for the same period a year prior.

Market appreciation for the quarter totaled $56 billion.

SSGA had $1.594 trillion in equities as of June 30, up 2.2% from March 31 and up 22% from June 30, 2016. Fixed income accounted for $398 billion, up 4.5% from three months earlier and up 18.8% from a year earlier. Cash, at $334 billion, was flat from three months earlier and down 12.1% from a year earlier. Alternatives were $149 billion, down 3.2% from March 31 and down 8% from June 30, 2016, and multiasset-class solutions, at $131 billion, was down 0.8% from three months earlier and up 12% from 12 months earlier.

Assets under custody and administration were $31.04 trillion, up 4.1% from March 31 and up 11.7% from June 30, 2016.

SSGA's investment management fees totaled $397 million in the second quarter, up 3.9% from the previous quarter and up 35.5% from the year-earlier quarter. State Street attributed the annual increase to an estimated $72 million from the acquired GE Asset Management business, higher global equity markets and higher revenue-yielding net ETF flows. The company attributed the quarterly increase to higher global equity markets.

Revenue for the parent company was $2.81 billion for the quarter, up 5.3% from the prior quarter and up 9.2% from the year-earlier quarter. State Street's net income was $620 million for the second quarter, flat from the previous quarter but up 23.5% from the second quarter of 2016.