Select Sector SPDRs are unique Exchange Traded Funds that unbundle the benchmark S&P 500 and give investors ownership in particular sectors or groups of industries that are components of the S&P 500 Index. The ten Funds together comprise all of the companies included in the S&P 500.
Unlike conventional open-end mutual funds which price once per day, Select Sector SPDRs are listed and trade on NYSE Arca so investors are able to buy or sell shares throughout the day. This intraday trading gives investors the power to react swiftly to market changes. Prices will fluctuate throughout the trading day.
No. There is no sales load on Select Sector SPDRs but ordinary brokerage commissions do apply.
The expected annual operating expenses for Select Sector SPDRs are approximately 0.18%.
Select Sector SPDRs may be appropriate for investors who seek a relatively low-cost "passive" approach for investing in a portfolio of equity securities of companies in a particular sector or group of industries.
Select Sector SPDRs may pay quarterly cash dividends representing dividends accumulated on the stocks held by the respective Fund, less fees and expenses of the Fund. In addition, there may be opportunities for dividend reinvestment.
Yes. You can short Select Sector SPDRs.
Yes. Select Sector SPDRs can be bought on margin and are generally subject to the same terms that apply to common stock.
No. Unlike many investment companies, Select Sector SPDRs are not actively "managed." Although the Select Sector Index underlying each Select Sector SPDR will generally not be subject to frequent or large changes, periodic changes may occur as a result of a change in the S&P 500 Index. In addition, capital changes, e.g., mergers and spinoffs, or a change in the business or character of a component company within the Select Sector Index, may result in its removal from the S&P 500.
No. If you purchase the ten Select Sector SPDRs with weightings that correspond to the S&P 500 weightings you will be close. The ten Select Sector SPDRs together will include all of the companies represented in the S&P 500 and all the stocks in the S&P 500 will be allocated to one and only one of the Select Sector SPDRs. However, due to diversification requirements, certain Select Sector SPDRs will not have the exact individual component weightings of the broad S&P 500 Index.
State Street Bank and Trust Company serves as administrator and custodian of the Trust and SSgA Funds Management, Inc. serves as the Trust's advisor. The value of Select Sector Indexes is calculated by Standard & Poor's. The Distributor is ALPS Portfolio Solutions Distributor, Inc., a registered broker-dealer.
The Select Sector SPDRs Funds are subject to investment risks similar to those of stocks, including risk associated with short-selling and margin account maintenance.