While the majority of index managers' assets reflected the minimal growth of the market, there were some notable exceptions.
Hartford Investment Management Co. saw particular growth in worldwide indexed assets in the first six months of the year, up 86.5% to $15.8 billion in assets as of June 30, from $8.5 billion as of Dec. 31. Paula Ryan, executive vice president in the Hartford office, said the growth was due to a single client making two different passive allocations, one Lehman-aggregate based and the other mortgage-based. That increase put the firm into the top 25
Ryan Labs Inc., New York, reported $1.9 billion in worldwide indexed assets as of June 30. The firm had reported $18.9 billion in indexed assets as of Dec. 31, but has changed the classification of funds under management, according to a spokeswoman. LSV Asset Management, reported $1.8 billion as of June 30. While that appears to be a precipitous drop from the year-end report of $35.4 billion, the firm had incorrectly classified actively managed value equity assets for the earlier survey.
Total institutional tax-exempt indexed assets of all firms surveyed fell during the six months, particularly in domestic and international equities. Firms reported $2.16 trillion in institutional tax-exempt indexed assets, an overall drop of 2% and a market-adjusted decrease of 2.5% from $2.2 trillion as of Dec. 31. Domestic equities fell a market-adjusted 4.2% to $1.29 trillion from $1.34 trillion, and international equities fell to $239 billion from $262.6 billion, an overall decrease of 9.2% and a market-adjusted drop of 8.4%.
Much of the fall in total institutional tax-exempt assets was due to SSgA. As of June 30, the firm reported $596 billion in institutional tax-exempt indexed assets, down 2.9% from $614 billion at the end of 2004. "We attribute this small drop to an overall decline in both the U.S. and foreign stock markets during the period," said spokeswoman Denise Robbi-Arena.
BGI's institutional tax-exempt indexed assets rose slightly, up 1.9% overall, to $647.6 billion as of June 30.
Firms that saw a large spike in institutional tax-exempt indexed assets included Dimensional Fund Advisors Inc., Santa Monica, Calif., which reported $48.2 billion as of June 30, an overall gain of 28% from $37.7 billion as of Dec. 31. The increase is due to new business, according to Judith Jonas in DFA's institutional marketing group.
Enhanced indexed assets continued their growth, with $409.8 billion reported as of June 30, up 7.2% from $380.1 billion as of Dec. 31. BGI has slightly more than a quarter of all reported enhanced business, with $103 billion as of June 30, a 2.8% increase from $100.2 billion as of Dec.31. DFA saw the largest increase of enhanced indexed assets, with $46 billion, a 28% increase in the first half of 2005.
BGI and SSgA led the way in managing exchange-traded funds, holding 94.2% of all the ETF assets reported by participating managers. BGI managed $152.6 billion in ETFs as of June 30, with about $873 million from U.S. institutional tax-exempt assets. SSgA managed $74.2. billion in ETFs, none institutionally. The next closest manager, Vanguard Group Inc., Malvern, Pa., had $8 billion. This is the first time respondents were asked for ETF information.
Lincoln Capital Fixed Income Management Co. LLC, Chicago, officially became Lehman Brothers Asset Management on April 1, following the 2003 purchase of the firm by Lehman Brothers. Ameriprise Financial, Minneapolis, (formerly American Express Financial Corp.) and Columbia Management Group, New York, did not provide June 30 data.