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Fact Sheet | Morningstar Hypothetical Financial Professionals Only | Zephyr Report Financial Professionals Only | White Paper Financial Professionals Only | EQL - Equal Sector ETF

Financial Professionals Only Financial Professionals Only

Equal Sector Strategy

An Equal Sector Strategy is a strategy that delivers exposure to the US Large Cap Equity market by investing equal proportions in each of the 9 Select Sector SPDRs.

This strategy delivers moderate, yet meaningful exposure to every sector of the market. As a result, investors have the opportunity not only to participate in a sector rally wherever it may occur, but also to minimize the negative impact of a crash in any individual sector. In addition, the Equal Sector Strategy has the following benefits:

  • Diversification
  • Transparency and control over sector allocations3
  • Consistent performance - outperformed the S&P 500 over 3, 5 and 10 year periods
  • Lower volatility than the S&P 5001

Equal Sector Performance

The following chart shows the performance of an Equal Sector Strategy over the last 10 years:

Comparison of Change in Value of a $10,000 Investment* Comparison of Change in Value of a $10,000 Investment

* 10 Years Ended December 31, 2008
Source: Morningstar. The chart above shows how a hypothetical investment of $10,000 in the Equal Sector Strategy at its inception would have performed vs. an investment in the S&P 500 index. The hypothetical example does not represent the returns of any particular investment.

Equal Sector Weight Strategy vs. the S&P 500*

One Year Three Year Five Year 10 Year
Equal Sector Strategy -26.36 -6.28 -0.21 0.65
S&P 500 -26.21 -8.22 -2.24 -2.22
Performance data quoted represents past performance. Current performance data may be higher or lower than actual data quoted. For the most current month-end performance data please visit www.sectorspdrs.com. Past performance does not guarantee future results.
* Average Annual Returns as of June 30, 2009
Total return performance shown is based on an equally-weighted investment in the underlying 9 Select Sector SPDR Funds. The Equal Weight Sector Strategy is represented by the nine Select Sector SPDRs ETFs that are purchased individually, allocated equally, and rebalanced quarterly. As a result, each sector has an initial weighting of 11.1%. The expense ratio for each Select Sector SPDR is 0.21%. There are no sales loads on Select Sector SPDR shares but ordinary brokerage commissions do apply and this expense is not reflected in performance calculations. If such expenses were reflected, the performance shown would be lower. Investors are responsible for rebalancing the portfolio quarterly.
Asset allocation cannot assure a profit nor protect against a loss. Sector ETF products are also subject to sector risk and non-diversification risk, which generally will result in greater price fluctuations than the overall market. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost.

Equal Sector Advantages

As shown by the Table an Equal Sector Strategy has outperformed the S&P 500 by an average of 306 basis points2 per year over the last 10 years. Furthermore, the Equal Sector Strategy was:

1) Not back-tested, but based on actual investment results that are net of fees
2) Achieved with lower volatility than the S&P 500
3) Simple, transparent and provides control over sector allocations3

Fact Sheet | Morningstar Hypothetical Financial Professionals Only | Zephyr Report Financial Professionals Only | White Paper Financial Professionals Only | EQL - Equal Sector ETF

Financial Professionals Only Financial Professionals Only

1Morningstar
2Basis point: One hundredth of a percentage point (0.01%).
3Owning sectors individually provides investors with transparency and control over their sector exposure. ETFs are considered transparent because their portfolio holdings are disclosed daily.

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Standardized performance data of Select Sector SPDRs is available in the Performance topic.