Standard & Poor's Depositary Receipts

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For the game character SPDR, see I Love Bees

SPDRs are shares of a family of exchange-traded funds (ETFs) traded in the United States and managed by State Street Global Advisors (SSgA). Informally, they are also known as Spyders or Spiders.

The name is an acronym for the first member of the family, the Standard & Poor's Depository Receipts (AMEX: SPY), the biggest ETF in the U.S., which is designed to track the S&P 500 stock market index.

The funds are formulated as Unit Investment Trusts. In 2007, SSgA rebranded its other United States ETFs as SPDRs, including the StreetTRACKS family and its other flagship ETF share, the DIAMOND (AMEX: DIA), that tracks the Dow Jones Industrial Average. This move united all U.S. ETFs managed by SSgA, a total of 23 at that time, under a single brand.[1] At the end of 2006, the total portfolio that became known as SPDRs had $102 billion of assets under management.[1]

Contents

[edit] SPY – the S&P 500 ETF

Standard & Poor's Depository Receipts (AMEX: SPY) were launched by Boston fund manager SSgA in 1992–1993 as the first exchange-traded fund shares still traded in the United States (preceded by the short-lived Index Participation Shares that launched in 1989.) [2] [3] [4] Devised by American Stock Exchange executive Nathan Most, the fund first traded on that market, but has since been listed elsewhere, including the New York Stock Exchange (NYSE: SPY). According to web glossary InvestorWords.com:

One SPDR unit is valued at approximately 1/10th of the value of the S&P 500. Dividends are distributed quarterly, and are based on the accumulated stock dividends held in trust, less any expenses of the trust. [5]

With a market capitalization of $77 billion as of April 2008, it is the largest exchange-traded fund. [6]

The sponsor is PDR Services LLC, a wholly-owned subsidiary of American Stock Exchange LLC.

[edit] Other funds

Mid-Cap SPDRs (AMEX: MDY) were launched by the Bank of New York in 1995 to track Standard & Poor's S&P MidCap 400 index of middle-market equity shares. [7] [8]

DIAMONDS (AMEX: DIA) were developed, like the original SPDR, by SSgA in cooperation with the American Stock Exchange.[7] DIAMOND shares are designed to track the Dow Jones Industrial Average.

In 1998, SSgA and Merrill Lynch introduced the Sector Spiders, which follow the nine sectors of the S&P 500.[9] [10]

SSgA also launched a number of index-based ETFs under the brand StreetTRACKS. These were renamed SPDRs in 2007.

SSgA manages ETFs that are sold on exchanges outside the United States. These are not known as SPDRs.

[edit] References

  1. ^ a b "Spyders widen web", TheStreet.com, 2007-01-08. 
  2. ^ John C. Bogle, 'Value' Strategies, Wall Street Journal (Feb. 9, 2007).
  3. ^ Wilfred Dellva, Exchange-Traded Funds Not for Everyone, Journal of Financial Planning (Apr. 2001).
  4. ^ Jennifer Bayot. "Nathan Most Is Dead at 90; Investment Fund Innovator", New York Times, 2004-12-10. Retrieved on 2008-04-23. 
  5. ^ SPDR. InvestorWords.com, WebFinance, Inc.. Retrieved on 2008-04-23.
  6. ^ SPY Fundamentals. American Stock Exchange (2008-04-23). Retrieved on 2008-04-23.
  7. ^ a b Gastineau, Gary (2002). The Exchange-Traded Funds Manual. John Wiley and Sons, 35. ISBN 0471220922. Retrieved on 2008-04-24. 
  8. ^ About MidCap Spiders. American Stock Exchange. Retrieved on 2008-04-24.
  9. ^ Ferri, Richard A. (2008). The ETF Book, John Wiley and Sons, 191 ISBN 0470130636.
  10. ^ Gastineau, Gary (2002). The Exchange-Traded Funds Manual. John Wiley and Sons, 37. ISBN 0471220922. Retrieved on 2008-04-24. 

[edit] See also

[edit] External links