State Street Global Advisors has announced that the Financial Services Select Sector SPDR® Fund...
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(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 percent2.
“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