About Select Sector SPDRs
What are Select Sector SPDR Funds?
Select Sector SPDRs are unique Exchange Traded Funds that unbundle the benchmark S&P 500 and give holders ownership in particular sectors or groups of industries that are components of the S&P 500 Index. The nine Funds together comprise all of the companies included in the S&P 500.
When can I buy or sell Select Sector SPDRs?
Unlike conventional open-end mutual fund 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.
Is there a sales load on Select Sector SPDRs?
No. There is no sales load on Select Sector SPDRs but ordinary brokerage commissions do apply.
What are the annual operating expenses?
The expected annual operating expenses for Select Sector SPDRs are approximately 0.20%.
Who should invest in Select Sector SPDRs Funds?
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.
Will Select Sector SPDRs pay a dividend?
Just like stock, 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.
Can I short Select Sector SPDRs?
Yes. You can short Select Sector SPDRs and unlike ordinary common stock, Select Sector SPDRs can be sold short on a downtick at any time during trading hours.
Can Select Sector SPDRs be purchased on margin?
Yes. Select Sector SPDRs can be bought on margin and are generally subject to the same terms that apply to common stock.
Should I expect high portfolio turnover in any of the Select Sector SPDRs?
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.
If I buy all nine Select Sector SPDRs, am I exactly replicating the S&P 500?
No. If you purchase the nine Select Sector SPDRs with weightings that correspond to the S&P 500 weightings you will be close. The nine 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.
Who is responsible for the management of the Trust?
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 NYSE Arca. The distributor is ALPS Distributors, 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.