NYSE-Powered ETF Leaders: State Street’s Gunjan Chauhan

ETF Trends Editor-in-Chief Lara Crigger sat down with State Street’s Gunjan Chauhan for this edition of “ETF Leaders Powered by the New York Stock Exchange,” at Exchange: An ETF Experience 2022.

In discussing the big areas of focus for State Street this year, Chauhan explained that a lot of things have remained the same since last year, but there has been an effort to expedite this work. These efforts are focused primarily on fixed income securities, which have been accelerated by the COVID-19 crisis and the adoption of fixed income ETFs by a wide range of users.

Another area of ​​focus is ESG. “I think there’s a tremendous opportunity, and we’ve already seen tremendous growth,” Chauhan declared. This growth has been observed mainly in continental Europe, but there are also strong signals in the American markets.

The third key focus area is active. With over 300 ETF launches in 2021 in the ETF space that qualify as assets, it’s hard to ignore, making it a priority.

A fourth focus is Asia-Pacific, taking into account the entire global geographic footprint, which also represents a real opportunity in this market for State Street.

Fixed Income Fortunes

Back to fixed income, looking at what investors should be thinking about with this sector in 2022, Chauhan said it’s very exciting because acceleration has led to such growth, which has enabled a wider range of users and a broader and deeper range of use cases.

“Fixed income ETFs have really become a signal for perhaps what we will see in the months and years to come as bond markets continue to evolve and modernize,” Chauhan added.

This space has become a price discovery tool for many users. It has also been shown to provide them with access to liquidity when the underlying markets are closed or lightly traded. There have also been the traditional cases of investment case for fixed income ETFs that are really starting to grow. One can see how traditional fixed income investors involved in the cash bond markets are now looking at the additive features that an ETF wrapper around these fixed income securities can offer.

“With fixed income ETFs making up only 1% of the entire bond market, compared and contrasted with equity ETFs representing 5% of the entire equity market, I think there is a tremendous opportunity for growth,” said Chauhan.

ESG advantage

ESG is another previously mentioned growth area that has attracted the interest of many advisors and investors. From this point of view, Chauhan noted that there is still a lot of learning and growth that needs to take place in this market. With that in mind, State Street is looking at what the data is saying and what they’re hearing from the investor base.

State Street’s investor base is global, so they benefit from understanding what’s happening in a number of different markets and really bring some of that best thinking to US investors at the right time.

“We’re looking at the date, and anything classified as a global sustainable fund in 2021 saw a 12% increase from Q3 to Q4, with over $124 billion in inflows into funds considering applying to them. an ESG factor”, Chauhan Explain.

These are significant numbers and hard to ignore, further underscoring that this is a journey of discovery for ESG, which will require training and more track to grow in this market as people better understand what ESG will really mean for the future.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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