Mutual Fund Summary Prospectus (497k)
October 31 2013 - 5:05PM
Edgar (US Regulatory)
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SPDR
®
Barclays Short Term High Yield Bond ETF
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SJNK
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(NYSE Ticker)
SUMMARY PROSPECTUS - OCTOBER 31, 2013
Before you invest in the SPDR Barclays
Short Term High Yield Bond ETF (the Fund), you may want to review the Funds prospectus and statement of additional information, which contain more information about the Fund and the risks of investing in the Fund. The Funds
prospectus and statement of additional information dated October 31, 2013, are incorporated by reference into this summary prospectus. You can find the Funds prospectus and statement of additional information, as well as other information
about the Fund, online at https://www.spdrs.com/product/fund.seam?ticker=SJNK. You may also obtain this information at no charge by calling
(866) 787-2257
or by sending an
e-mail
request to Fund_inquiry@ssga.com.
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INVESTMENT OBJECTIVE
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The SPDR Barclays Short Term High Yield Bond ETF (the Fund) seeks to provide investment results that, before fees and expenses,
correspond generally to the price and yield performance of an index that tracks the U.S. high yield short term corporate bond market.
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FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund (Shares). This table and the example below do not reflect brokerage commissions you may
pay on purchases and sales of the Funds Shares.
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ANNUAL FUND OPERATING EXPENSES
(expenses that you pay each year as a percentage of the value of your
investment):
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MANAGEMENT FEES
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0.40%
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DISTRIBUTION AND SERVICE (12b-1) FEES*
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0.00%
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OTHER EXPENSES
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0.00%
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TOTAL ANNUAL FUND OPERATING EXPENSES
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0.40%
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*
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The Fund has adopted a Distribution and Service (12b-1) Plan pursuant to which payments of up to 0.25% of average daily net assets may be made, however, the Board
has determined that no such payments will be made through at least October 31, 2014.
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EXAMPLE:
This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Fund for the time periods indicated, and then sell all of your Shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Funds operating expenses
remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
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YEAR 1
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YEAR 3
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YEAR 5
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YEAR 10
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$41
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$128
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$224
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$505
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PORTFOLIO TURNOVER:
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund Shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Funds performance. During the most recent fiscal
year, the Funds portfolio turnover rate was 54% of the average value of its portfolio.
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THE FUNDS PRINCIPAL
INVESTMENT STRATEGY
In seeking to track the performance of the Barclays US High Yield 350mn Cash Pay 0-5 Yr 2% Capped Index (the
Index), the Fund employs a sampling strategy, which means that the Fund is not required to purchase all of the securities represented in the Index. Instead, the Fund may purchase a subset of the securities in the Index in an effort to
hold a portfolio of securities with generally the same risk and return characteristics of the Index. The quantity of holdings in the Fund will be based on a number of factors, including asset size of the Fund. Based on its analysis of these factors,
SSgA Funds Management, Inc. (SSgA FM or the Adviser), the investment adviser to the Fund, may invest the Funds assets in a subset of securities in the Index or may invest the Funds assets in substantially all of
the securities represented in the Index in approximately the same proportions as the Index.
Under normal market conditions, the Fund
generally invests substantially all, but at least 80%, of its total assets in the securities comprising the Index or in securities that the Adviser determines have economic characteristics that are substantially identical to the economic
characteristics of the securities that comprise the Index. The Fund will provide shareholders with at least 60 days notice prior to any material change in this 80% investment policy. In addition, the Fund may invest in debt securities
that are not included in the Index, cash and cash equivalents or money market instruments, such as repurchase agreements and money market funds (including money market funds advised by the Adviser).
The Index is designed to measure the performance of short-term publicly issued U.S. dollar-denominated high yield corporate bonds. High yield
securities are generally rated below investment-grade and are commonly referred to as junk bonds. The Index includes publicly issued U.S. dollar denominated, non-investment-grade, fixed rate, taxable corporate bonds that have a remaining
maturity of less than 5 years regardless of optionality, are rated between Caa3/CCC-/CCC- and Ba1/BB+/BB+ using the middle rating of Moodys Investors Service, Inc., Fitch, Inc., or Standard & Poors, Inc., respectively, and have
at least a $350 million outstanding par value. The Index includes only corporate sectors. The corporate sectors are Industrial, Utility and Financial Institutions. Excluded from the Index are non-corporate bonds, structured notes with embedded swaps
or other special features, bonds with equity-type features (e.g., warrants, convertibility), floating-rate securities and securities that move from fixed to floating-rate, Emerging Market Bonds, defaulted bonds, original issue zero coupon bonds,
private placements and payment in kind securities. The Index is issuer-capped and the securities in the Index are updated on the index rebalancing date. As of September 30, 2013, there were approximately 399 securities in the Index and the
modified adjusted duration of securities in the Index was approximately 2.14 years.
The Index is sponsored by Barclays, Inc. (the
Index Provider) which is not affiliated with the Fund or the Adviser. The Index Provider determines the composition of the Index and the relative weightings of the securities in the Index and publishes information regarding the market
value of the Index.
PRINCIPAL RISKS OF INVESTING IN THE FUND
As with all investments, there are certain risks of investing in the Fund, and you could lose money on an investment in the Fund.
PASSIVE STRATEGY/INDEX RISK:
The Fund is managed with a passive investment strategy, attempting to track the performance of an unmanaged index of securities. This differs from an actively managed fund, which
typically seeks to outperform a benchmark index. As a result, the Fund may hold constituent securities of the Index regardless of the current or projected performance of a specific security or a particular industry or market sector. Maintaining
investments in securities regardless of market conditions or the performance of individual securities could cause the Funds return to be lower than if the Fund employed an active strategy.
INDEX TRACKING RISK:
While the Adviser seeks to track the performance of the Index as closely as possible (
i.e.,
achieve a high degree of correlation with the Index), the Funds return may
not match or achieve a high degree of correlation with the return of the Index due to operating expenses, transaction costs, cash flows, regulatory requirements and operational inefficiencies. For example, the Adviser anticipates that it may take
several business days for additions and deletions to the Index to be reflected in the portfolio composition of the Fund.
DEBT SECURITIES INVESTING RISK:
The value of the debt securities may increase or decrease as a result of the following: market fluctuations, increases in interest rates, inability of issuers to repay principal and
interest or illiquidity in debt securities markets; the risk of low rates of return due to reinvestment of securities during periods of
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falling interest rates or repayment by issuers with higher coupon or interest rates; and/or the risk of low income due to falling interest rates. To the extent that interest rates rise, certain
underlying obligations may be paid off substantially slower than originally anticipated and the value of those securities may fall sharply. This may result in a reduction in income from debt securities income.
HIGH YIELD SECURITIES RISK:
Securities rated below investment grade, commonly referred to as junk bonds, include bonds that are rated Ba1/BB+/BB+ or below by Moodys Investors Service, Inc., Fitch,
Inc., or Standard & Poors, Inc., respectively, or unrated securities considered to be of equivalent quality by the Adviser, and may involve greater risks than securities in higher rating categories. Such bonds are regarded as
speculative in nature, involve greater risk of default by the issuing entity and may be subject to greater market fluctuations than higher-rated fixed income securities. They are usually issued by companies without long track records of sales and
earnings, or by those companies with questionable credit strength. The retail secondary market for these junk bonds may be less liquid than that of higher-rated securities and adverse conditions could make it difficult at times to sell
certain securities or could result in lower prices than those used in calculating the Funds net asset value. When the Fund invests in junk bonds, it may also be subject to greater credit risk because it may invest in debt
securities issued in connection with corporate restructuring by highly leveraged issuers or in debt securities not current in the payment of interest or principal or in default.
INDUSTRIAL SECTOR RISK:
Industrial companies are affected by supply and demand both for their specific product or service and for industrial sector products in general. Government regulation, world events,
exchange rates and economic conditions will likewise affect the performance of these companies. Aerospace and defense companies, a component of the industrial sector, can be significantly affected by government spending policies because companies
involved in this industry rely to a significant extent on government demand for their products and services. Thus, the financial condition of, and investor interest in, aerospace and defense companies are heavily influenced by governmental defense
spending policies which are typically under pressure from efforts to control the government budgets. Transportation securities, a component of the industrial sector, are cyclical and have occasional sharp price movements which may result from
changes in the economy, fuel prices, labor agreements and insurance costs.
UTILITIES SECTOR RISK:
The rates that traditional regulated utility companies may charge their customers generally
are subject to review and limitation by governmental regulatory commissions. Although rate changes of a utility usually fluctuate in approximate correlation with financing costs due to political and regulatory factors, rate changes ordinarily occur
only following a delay after the changes in financing costs. This factor will tend to favorably affect a regulated utility companys earnings and dividends in times of decreasing costs, but conversely, will tend to adversely affect earnings and
dividends when costs are rising. The value of regulated utility debt securities (and, to a lesser extent, equity securities) tends to have an inverse relationship to the movement of interest rates. Certain utility companies have experienced full or
partial deregulation in recent years. These utility companies are frequently more similar to industrial companies in that they are subject to greater competition and have been permitted by regulators to diversify outside of their original geographic
regions and their traditional lines of business. These opportunities may permit certain utility companies to earn more than their traditional regulated rates of return. Some companies, however, may be forced to defend their core business and may be
less profitable.
Among the risks that may affect utility companies are the following: risks of increases in fuel and
other operating costs; the high cost of borrowing to finance capital construction during inflationary periods; restrictions on operations and increased costs and delays associated with compliance with environmental and nuclear safety regulations;
and the difficulties involved in obtaining natural gas for resale or fuel for generating electricity at reasonable prices. Other risks include those related to the construction and operation of nuclear power plants; the effects of energy
conservation and the effects of regulatory changes.
FINANCIAL SECTOR RISK:
Financial services companies are subject to extensive governmental regulation which may limit both the amounts and types of loans and other financial commitments they can make, and the
interest rates and fees they can charge. Profitability is largely dependent on the availability and cost of capital funds, and can fluctuate significantly when interest rates change or due to increased competition. In addition, the recent
deterioration of the credit markets generally has caused an adverse impact in a broad range of markets, including U.S. and international credit and interbank money markets generally, thereby affecting a wide range of financial
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institutions and markets. Recent events in the financial sector have resulted, and may continue to result, in an unusually high degree of volatility in the financial markets, both domestic and
foreign, and cause certain financial services companies to incur large losses. Numerous financial services companies have experienced substantial declines in the valuations of their assets, taken action to raise capital (such as the issuance of debt
or equity securities), or even ceased operations. These actions have caused the securities of many financial services companies to experience a dramatic decline in value. Credit losses resulting from financial difficulties of borrowers and financial
losses associated with investment activities can negatively impact the sector. Insurance companies may be subject to severe price competition.
NON-DIVERSIFICATION RISK:
The Fund is
non-diversified and may invest a larger percentage of its assets in securities of a few issuers or a single issuer than that of a diversified fund. As a result, the Funds performance may be disproportionately impacted by the performance of
relatively few securities.
FUND PERFORMANCE
The Fund has not yet completed a full calendar year of investment operations and therefore does not have any performance history. Once the Fund has completed a full calendar year of operations, a
bar chart and table will be included that will provide some indication of the risks of investing in the Fund by showing the variability of the Funds returns based on net assets and comparing the Funds performance to the Index.
PORTFOLIO MANAGEMENT
INVESTMENT ADVISER
SSgA FM serves as the investment adviser to the Fund.
PORTFOLIO MANAGERS
The professionals primarily responsible for the day-to-day management of the Fund are Michael Brunell, Patrick Bresnehan and Kyle Kelly.
MICHAEL BRUNELL, CFA
is a Vice President of SSgA FM and is a member of
the Fixed Income, Currency and Cash Investments Team. He joined the Adviser in 1997.
PATRICK BRESNEHAN, CFA
is a Vice President of SSgA FM and a Senior Portfolio Manager in the Fixed Income, Currency and Cash
Investments Team. He joined the Adviser in 2010.
KYLE KELLY, CFA,
FRM
is a Principal of SSgA FM and a Portfolio Manager in the Fixed Income, Currency and Cash Investments Team. He joined the Adviser in 2007.
PURCHASE AND SALE INFORMATION
The Fund will issue (or redeem) Shares to certain institutional investors (typically market makers or other broker-dealers) only in large blocks of 100,000 Shares known as Creation
Units. Creation Unit transactions are typically conducted in exchange for the deposit or delivery of in-kind securities and/or cash constituting a substantial replication, or a representation, of the securities included in the Funds
benchmark Index.
Individual Shares of the Fund may only be purchased and sold on the NYSE Arca, Inc., other national securities
exchanges, electronic crossing networks and other alternative trading systems through your broker-dealer at market prices. Because Fund Shares trade at market prices rather than at net asset value (NAV), Shares may trade at a price
greater than NAV (premium) or less than NAV (discount).
TAX INFORMATION
The Funds distributions are expected to be taxed as ordinary income and/or capital gains, unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or individual
retirement account.
SJNKSUMPRO
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Precise in a world that isnt.
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