State Street Global Advisors (SSGA), the asset management business of State Street Corporation (NYSE:STT), today announced that the Financial Services Select Sector SPDR® Fund (XLFS) and the Real Estate Select Sector SPDR® Fund (XLRE) began trading on the NYSE Arca. Providing precise exposure to financial services and real estate sectors, the newest Select Sector SPDRs reflect revisions to the Global Industry Classification Standard (GICS) structure announced by S&P Dow Jones Indices that will be implemented in August 2016. XLFS and XLRE are the first new Select Sector SPDRs launched since the suite was introduced in 1998.
“Investors of all types are increasingly seeking to express a targeted investment viewpoint. Our sector SPDR ETFs have offered efficient exposure since 1998, and remain the industry standard,” said James Ross, executive vice president and global head of SPDR Exchange Traded Funds at State Street Global Advisors. “As investors continue to expand their uses of sector ETFs, they are interested in gaining more granular exposure to financial companies, in particular being consistent with evolutions in the GICS standards. For those looking to maintain broad-based exposure to financials, our existing Financial Select Sector SPDR (XLF), which provides the most liquid1 exposure to the broader financial sector, will remain unchanged.”
Concurrent with the launch of both XLFS and XLRE, the expense ratios for the entire Select Sector SPDR ETF suite will be reduced from 0.15 percent to 0.14 percent. The gross expense ratio for XLFS and XLRE is 0.15 percent and after expense waivers of 0.01 percent the net expense ratio is 0.14 percent.2
“When we launched Sector SPDRs in 1998, our expense ratio was 0.65 percent. As more and more institutional and now individual investors have incorporated Sector SPDRs into their investment strategies, we have been able to drive our overall expenses down,” said Dan Dolan, Director – Wealth Management Strategies, Select Sector SPDR Trust3. “The result is that today, Select Sector SPDRs are the undisputed leader in sector ETFs by assets and liquidity.”4
The new XLFS fund will seek to track the Financial Services Select Sector Index, which includes companies from the following industries: diversified financial services, insurance, banks, capital markets, consumer finance, thrifts and mortgage real estate investment trusts (REITs). The new XLRE fund will seek to track the Real Estate Select Sector Index, which includes real estate management, development and REITs, with the exception of mortgage REITs.
Both indices are maintained in accordance with the following criteria, which is consistent with the methodology for the other Select Sector Indexes:
- Each security in the index is a constituent company of the S&P 500 Index; and
- Both indices are calculated by Standard & Poor's using a modified market capitalization methodology.
SSGA’s leading suite of US-listed select sector SPDR ETFs includes 11 funds with $84.3 billion in assets as of 9/30/15.5
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. For more information, visit www.spdrs.com.
About State Street Global Advisors
For nearly four decades, State Street Global Advisors has been committed to helping financial professionals and those who rely on them achieve their investment objectives. We partner with institutions and financial professionals to help them reach their goals through a rigorous, research-driven process spanning both active and index disciplines. We take pride in working closely with our clients to develop precise investment strategies, including our pioneering family of SPDR ETFs. With trillions* in assets under management, our scale and global footprint provide unrivaled access to markets and asset classes, and allow us to deliver expert insights and investment solutions.
State Street Global Advisors is the investment management arm of State Street Corporation.
*Assets under management were $2.4 trillion as of June 30, 2015. Assets under management include approximately $26.7 billion (as of June 30, 2015), for which State Street Global Markets, LLC, an affiliate of SSgA, serves as the distribution agent.
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.
The S&P 500 is an index of approximately 500 common stocks that is generally considered representative of the U.S. stock market. The index is weighted toward stocks with large market capitalizations and represents approximately two-thirds of the total market value of all domestic common stocks.
You cannot invest directly in an index.
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
Investing involves risk, including the risk of loss of principal.
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 1-866-787-2257, download a prospectus or summary prospectus now, or talk to your financial advisor. Read it carefully
1 As measured by trading volumes, Source: Bloomberg, 9/30/2015.
2 SSGA Funds Management, Inc. (the “Adviser”) has contractually agreed to waive its advisory fee and reimburse certain expenses, until January 31, 2017, so that the annual Fund operating expenses of the Fund are limited to no more than 0.14% of the Fund's average daily net assets (exclusive of non-recurring account fees and extraordinary expenses). The Adviser may continue such waiver and/or reimbursement from year to year, but there is no guarantee that the Adviser will do so after January 31, 2017. The waiver and/or reimbursement may not be terminated prior to January 31, 2017 except with the approval of The Select Sector SPDR Trust's Board of Trustees.
3 Dan Dolan is a Registered Representative of ALPS Portfolio Solutions Distributor, Inc.
4 Source – Bloomberg, SSGA. Period measured: August 31, 2014 – August 31, 2015
5 Source: SSGA, Bloomberg