State Street Global Advisors Launches VRDO Municipal Bond ETF

State Street Global Advisors (SSgA), the investment management arm of State Street Corporation (NYSE: STT), today announced that the SPDR® S&P® VRDO Municipal Bond ETF (Symbol: VRD) began trading on the NYSE Arca on September 24, 2009. Its annual expense ratio is 0.20 percent.

The SPDR S&P VRDO Municipal Bond ETF is designed to provide investors with access to municipal variable rate demand obligations (VRDOs), an asset class offering attractive yields and stable income that is exempt from federal taxes and often state and local income taxes as well. Specifically, it seeks to track the price and yield performance of the S&P National AMT-Free Municipal VRDO Index. As of September 21, 2009, the index, which includes VRDOs issued by U.S. states, local governments, or agencies, provides exposure to more than 377 issues.

VRDOs, which are often issued with maturities of up to 30 or 40 years, are considered short-term instruments because they have a 1-day or 7-day put feature that coincides with the timing of the daily or weekly yield reset.

“Developed in response to increasing demand for VRDOs, the SPDR S&P VRDO Municipal Bond ETF provides investors with access to a hard to reach corner of the municipal bond market where the required minimum denomination for issue purchase is $100,000,” said James Ross, senior managing director at State Street Global Advisors. “In offering precise, cost efficient exposure to VRDOs, the SPDR S&P VRDO Municipal Bond ETF provides a wide range of investors with an opportunity to enhance the diversification and tax efficiency of their portfolios.”

According to Standard & Poor’s research, the number of VRDO issues brought to market increased 32 percent in 2008.

The SPDR S&P VRDO Municipal Bond ETF complements State Street’s growing family of municipal bond SPDRs. As of August 31, 2009, the firm managed $1.4B in municipal bond ETF assets in the following funds:

SPDR Barclays Capital Municipal Bond ETF (TFI);
SPDR Barclays Capital Short Term Municipal Bond ETF (SHM);
SPDR Barclays Capital California Municipal Bond ETF (CXA); and
SPDR Barclays Capital New York Municipal Bond ETF (INY).

State Street Global Advisors is one of the largest ETF providers in the United States and globally. U.S. assets under management for SPDR ETFs totaled more than $160 billion as of August 31, 2009.

About State Street Global Advisors

State Street Global Advisors, the investment management arm of State Street Corporation (NYSE: STT), delivers investment strategies and integrated solutions to clients worldwide across every asset class, investment approach and style. With $1.6 trillion in assets under management at June 30, 2009, State Street Global Advisors has investment centers in Boston, Hong Kong, London, Montreal, Paris, Singapore, Sydney, Tokyo, Toronto and Zurich, and offices in 26 cities worldwide. For more information, visit State Street Global Advisors at www.ssga.com.

The “SPDR®” trademark is used under license from the McGraw-Hill Companies, Inc. No financial product offered by State Street Corporation or its affiliates is sponsored, endorsed, sold or promoted by McGraw-Hill. Standard & Poor S&P SPDR S&P 500 and Select Sector SPDRs are trademarks of The McGraw-Hill Companies, Inc., and have been licensed for use by State Street Bank and Trust Company.

ETFs trade like stocks, are subject to investment risk and will fluctuate in market value.

Frequent trading of ETFs could significantly increase commissions and other costs such that they may offset any savings from low fees or costs.

Passive management and the creation/redemption process can help minimize capital gains distributions.

Neither diversification nor asset allocation ensure a profit or guarantee against loss.

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.

Bond funds contain interest rate risk (as interest rate rise bond prices usually fall). The municipal market can be affected by adverse tax, legislative or political changes and the financial condition of the issuers of municipal securities. There are additional risks for funds that invest in mortgage-backed and asset-backed securities including the risk of issuer default: credit risk and inflation risk. A portion of income may be subject to some state and/or local taxes and for certain investors, a portion may be subject to the federal alternative minimum tax. The use of interest-rate and index swaps is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio security transactions. These transactions generally do not involve the delivery of securities or other underlying assets or principal.

Distributor: State Street Global Markets, LLC, member FINRA, SIPC, a wholly owned subsidiary of State Street Corporation. References to State Street may include State Street Corporation and its affiliates. Certain State Street affiliates provide services and receive fees from the SPDR ETFs.

Before investing, consider the funds’ investment objectives, risks, charges and expenses. To obtain a prospectus which contains this and other information, call 1-866-787-2257 or visit www.spdrs.com. Read it carefully.

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