The unchanged stance reflects the group’s assessment that macroeconomic conditions remain broadly similar to the prior year, with no significant shifts warranting rebalancing, the firm, which renamed this week said in a report on Tuesday.
Its decision affects both its Risk-Based and Target Income exchange-traded fund (ETF) model portfolios, which are widely used by financial advisers and platform providers to construct client portfolios.
According to the firm, while markets have been volatile, the overarching economic narrative has not meaningfully changed: growth remains slow but stable, inflation is easing and central banks are widely expected to enter a rate-cutting cycle.
A soft landing continues to be State Street’s base case, though the firm flagged ongoing risks in the medium-term, including elevated and “ultimately unsustainable” global debt and geopolitical instability.
The resolution of ongoing trade tensions will determine how these aforementioned risks evolve, however, State Street noted that the potential for improved productivity – primarily driven by the development and adoption of AI – could act as an offset to these risks.
Moreover, State Street believes fixed income remains a favoured asset class within the model portfolios, with elevated bond yields and less compelling equity-risk premiums reducing the need to chase higher-risk exposures. State Street said it sees quality and low-volatility equities as better positioned in today’s environment.
“In this environment of heightened volatility, we favour equity exposures that emphasise quality and low volatility characteristics,” the firm further stated.
While several new asset classes and strategies were considered, none offered a compelling enough improvement in risk-adjusted return to justify a shift in the strategic asset allocation, the firm said.
State Street’s update comes a day after it unveiled its new branding and identity as State Street Investment Management.
The firm stated the new brand name and visual identity highlights State Street’s focus on growth, engagement and commitment to product innovation.
Yie-Hsin Hung, president and CEO of the newly dubbed State Street Investment Management (SSIM), said 1 July 2025 marked “a new chapter” for the firm.
“Our new brand underscores our mission of investing in our clients as they invest in the markets, delivering tailored solutions and prioritising partnerships,” Hung said. “To us, the word ‘investment’ is not just about the capital markets.
“As a firm, we’re investing in our relationships, investing in innovation and investing in the future. We’re helping secure better outcomes for our clients and we’re pleased to present a new brand name that reflects this.”
As of 31 December 2024, SSIM is the fourth-largest asset manager in the world (according to Pensions & Investments Research Centre), with around US$4.67 trillion in assets under management.
