State Street Global Advisors reported assets under management of about $3.48 trillion as of Dec. 31, up 6.6% from three months earlier, but down 15.9% from a year earlier.
Parent company State Street Corp. attributed the year-over-year decline in AUM primarily to "lower quarter-end market levels, institutional net outflows and the impact of currency translation, partially offset by ETF net inflows," said a news release Friday.
In the fourth quarter, net outflows totaled $17 billion, including $4 billion in net outflows for long-term institutional assets, $40 billion in net outflows for cash, and $27 billion in net inflows for exchange-traded funds. The combined impact of market appreciation and foreign exchange added $233 billion in the fourth quarter.
ETFs rebounded in the fourth quarter after suffering two consecutive quarters of net outflows — $14 billion in the third quarter and $8 billion in the second quarter.
By asset class, equities had net outflows of $1 billion, while fixed income and multiasset solutions had net inflows of $21 billion and $3 billion, respectively, in the fourth quarter.
By comparison, net outflows totaled $9 billion in the third quarter, while the fourth quarter of 2021 had net inflows of $79 billion.
State Street also said in the release that its assets under custody and/or administration totaled $36.74 trillion as of Dec. 31, up 3% from Sept. 30, but down 15.9% from Dec. 31, 2021.
State Street attributed the year-over-year decline in AUC/A largely to "lower quarter-end market levels, a previously disclosed client transition and the impact of currency translation, partially offset by new business installations."
The quarterly increase in AUC/A was primarily due to "higher quarter-end equity market levels and the impact of currency translation."
In a call with analysts Friday, Ronald O'Hanley, chairman and CEO, responded to a question about merger-and-acquisition activity in light of State Street's decision to cancel a proposed acquisition of Brown Brothers Harriman & Co. Investor Services business in November.
"M&A is a way to help execute a strategy, to move it faster to enable it to get further than was anticipated, but it's not a strategy by itself," Mr. O'Hanley said. "We are very comfortable with our organic strategy. BBH was a scale-enhancing acquisition that we would have liked to have done, but it doesn't materially change — in fact, it doesn't change it all — our strategy."
