State Street Global Advisors (SSGA), the asset management business of State Street Corporation (NYSE:STT), today announced that, following the statement from S&P Dow Jones Indices regarding upcoming modifications to the index constituents of the Financial Select Sector Index (Financial Sector Index), The Financial Select Sector SPDR Fund (XLF) will make certain adjustments to its portfolio in order to efficiently continue to track the Financial Sector Index.
The modifications to the Global Industry Classification Standards (GICS®) previously announced by S&P Dow Jones Indices and MSCI Inc. will divide the current financial sector into two sectors: financial services and real estate. As a result, the Financial Sector Index will be reconstituted to remove real estate from the financial sector. Effective concurrent with changes to the Financial Sector Index, XLF will no longer have exposure to real estate securities (except mortgage REITs, which will remain in the Financial Sector Index consistent with the GICS reclassification, scheduled for September 16, 2016). These modifications to XLF are intended to allow investors to seek precise, liquid financial sector exposure that aligns with the updated GICS sector classifications.
In order to facilitate an efficient transition to the reconstituted Financial Sector Index, XLF will seek to obtain its real estate exposure in shares of The Real Estate Select Sector SPDR Fund (XLRE) in advance of the Financial Sector Index reconstitution. XLRE seeks to track the Real Estate Select Sector Index. Effective immediately, the operating fees and expenses of XLRE will be waived until September 16, 2016, such that XLRE will have an expense ratio of zero during that time period.
Upon effectiveness of the changes to the Financial Sector Index, XLF intends to issue a special dividend to its shareholders. The special dividend will be comprised of shares of XLRE.
Important dates for this special dividend are as follows:
Ex-Date: September 19, 2016
Record Date: September 21, 2016
Pay Date: September 22, 2016
Effective on the date of index reconstitution, the Financial Select Sector Index will include securities of companies from the following industries: diversified financial services, insurance, banks, capital markets, consumer finance, thrifts and mortgage finance, and mortgage real estate investment trusts (REITs). The Real Estate Select Sector Index includes real estate management, development and REITs, with the exception of mortgage REITs. The Indexes are two of the Select Sector Indexes developed and maintained in accordance with the following criteria: (1) each of the component securities in the Index is a constituent company of the S&P 500 Index; and (2) the Index is calculated by S&P Dow Jones Indices LLC based on methodology proprietary to S&P Dow Jones Indices LLC and BofA Merrill Lynch Research, using a modified market capitalization methodology.
SSGA’s leading suite of US-listed select sector SPDR ETFs includes 11 funds with $93.9 billion in assets as of May 31, 2016.
About SPDR Exchange Traded Funds
SPDR ETFs are a comprehensive family spanning an array of international and domestic asset classes. SPDR ETFs are managed by SSGA Funds Management, Inc., a registered investment adviser and wholly owned subsidiary of State Street Corporation. The funds provide investors with the flexibility to select investments that are precisely aligned to their investment strategy. Recognized as an industry pioneer, State Street created the first US listed ETF in 1993 (SPDR S&P 500® – Ticker SPY) and has remained on the forefront of responsible innovation, as evidenced by the introduction of many ground-breaking products, including first-to-market launches with gold, international real estate, international fixed income, and sector ETFs.
About State Street Global Advisors
For nearly four decades, State Street Global Advisors has been committed to helping our clients, and those who rely on them, achieve financial security. We partner with many of the world’s largest, most sophisticated investors and financial intermediaries to help them reach their goals through a rigorous, research-driven investment process spanning both indexing and active disciplines. With trillions* in assets, our scale and global reach offer clients access to markets, geographies and asset classes, and allow us to deliver thoughtful insights and innovative solutions.
State Street Global Advisors is the investment management arm of State Street Corporation.
*Assets under management were $2 trillion as of March 31, 2016. AUM reflects approx. $32.6B (as of 3/31/2016) with respect to which State Street Global Markets, LLC (SSGM) serves as marketing agent; SSGM and State Street Global Advisors are affiliated.
In general, ETFs can be expected to move up or down in value with the value of the applicable index. Although ETF shares may be bought and sold on the exchange through any brokerage account, ETF shares are not individually redeemable from the Fund. Investors may acquire ETFs and tender them for redemption through the Fund in Creation Unit Aggregations only. Please see the prospectus for more details.
ETFs trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETF's net asset value. Brokerage commissions will reduce returns. Index-based ETFs are passively managed and seek to track an index of securities. Expenses may cause the ETF's returns to deviate from the returns of the index.
Equity Securities may increase or decrease as a result of market fluctuations, changes in interest rates and perceived trends in stock prices.
Financial Services Sector Concentration Risk. Financial services companies may be subject to the risks of government regulation, deterioration of credit markets, losses resulting from financial difficulties of borrowers and losses resulting from investment activities.
Non-diversified funds invest a greater portion of assets in fewer securities and therefore may be more vulnerable to adverse changes in the market.
Real Estate Investment Trusts (REITS) investing may be subject to risks including, but not limited to, declines in the value of real estate, risks related to general economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrowers.
It is not possible to invest directly in an index. Index performance does not reflect charges and expenses associated with the fund or brokerage commissions associated with buying and selling a fund. Index performance is not meant to represent that of any particular fund.
Investing involves risk, including the risk of loss of principal.
Select Sector SPDR Funds bear a higher level of risk than more broadly diversified funds. All ETFs are subject to risk, including the possible loss of principal. Sector ETFs products are also subject to sector risk and nondiversification risk, which generally results in greater price fluctuations than the overall market.
ALPS Portfolio Solutions Distributor, Inc., a registered broker-dealer, is the distributor for the Select Sector SPDR Trust.
ALPS Portfolio Solutions Distributor, Inc. is not affiliated with State Street Global Markets, LLC
Before investing, consider the fund's investment objectives, risks, charges and expenses. To obtain a prospectus or summary prospectus which contains this and other information, call 1-866-SECTOR-ETF or visit http://www.sectorspdr.com/sectorspdr/ to download a prospectus or summary prospectus now, or talk to your financial advisor. Read it carefully
CORP-2020
Exp. Date: 06/3/2017
SSL000698
View source version on businesswire.com: http://www.businesswire.com/news/home/20160608006488/en/
Contacts:
Andrew Hopkins, +1-617-664-2422
Ahopkins2@StateStreet.com
