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
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version on businesswire.com: http://www.businesswire.com/news/home/20160608006488/en/
State Street CorporationAndrew Hopkins,
+1-617-664-2422Ahopkins2@StateStreet.com
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