State Street extends 30-year relationship with Harbor Capital Advisors to service new fixed income ETFs

Renewal and extension of mandate will see the custodian provide various ETF services for two new funds in the US.

By Jonathan Watkins

State Street has been appointed as the back-office servicing agent for Harbor Capital Advisors’ first actively-managed fully transparent fixed income ETFs, extending a long-standing relationship for mutual funds which has also been renewed. 

The new mandate covers two funds – the Harbor Scientific Alpha Income ETF (SIFI), and the Harbor Scientific Alpha High-Yield ETF (SIHY) – which were launched in September in the US.

As part of the agreement, State Street will provide various ETF servicing solutions including basket creation, dissemination and settlement, custody, fund accounting, N-PORT production, order-taking and transfer agency.  

In addition, the two organisations have also renewed their long-standing back-office agreement for Harbor’s mutual funds, which dates back 30 years. State Street provides Harbor with custody, fund accounting and N-PORT on $58 billion of assets. 

“To support the launch of Harbor’s two ETFs, State Street used its deep experience in the market to educate the Harbor team regarding the idiosyncrasies of ETFs and guide the firm to industry best practice, resulting in a successful launch,” said Frank Koudelka, global ETF product specialist at State Street. “State Street’s deep ETF expertise along with our consultative approach and integrated global technology have laid the groundwork for Harbor’s ETF growth strategy.” 

State Street has been picking up new ETF servicing mandates throughout 2021, with deals from Aberdeen Standard Investments, AllianceBernstein and VanEck.

The custodian also made the move in March to open its ETF platform to all asset managers and broker-dealers, even to those that are not a custody client of the organisation. The custodian said the Fund Connect ETF platform, which was previously only available to clients receiving securities services, will now be open to support all ETF issuers regardless of their service provider.

“As State Street continues to be an industry leader in the ETF space, we believe they are positioned well to support our goals of bringing more compelling ETF investment solutions to our clients,” said Steve Cook, Harbor managing director and head of ETFs.