Throughout all the releases of new exchange traded funds (ETFs) one core group of nine ETFs that have been around since 1998 are the Select Sector SPDRs. These ETFs track the different sectors of the S&P 500.
Originally, Merrill Lynch sponsored the SPDRs ETFs, but today it is considered the index agent for the ETFs. This means that whenever there is a change to the ETFs, Merrill Lynch decides in which sector the new stocks belong, explains David Hoffman for Investment News. Currently, State Street Global Advisors manages the SPDRs ETFs that have collected more than $20 billion in assets. With State Street Global Advisors managing the ETFs and ALPS distributing them, a separate, independent board of directors makes decisions regarding the operations of the Select Sector SPDRs, explains Daniel P. Dolan of ALPS Distributors. Having the independent board of directors has also helped lower expenses for the Select Sector SPDRs, but in general, ETF expenses have crept up, he says.
The nine Select Sector SPDRs ETFs and their performance year-to-date include:
- Consumer Discretionary Select Sector SPDR (XLY) – down 4.4%
- Consumer Staples Select Sector SPDR (XLP) – down 4.5%
- Energy Select Sector SPDR (XLE) – up 17.4%
- Financial Select Sector SPDR (XLF) – down 6.2%
- Health Care Select Sector SPDR (XLV) – up 3.5%
- Industrials Select Sector SPDR (XLI) – up 12.2%
- Materials Select Sector SPDR (XLB) – up 12.8%
- Technology Select Sector SPDR (XLK) – up 10.2%
- Utilities Select Sector SPDR (XLU) – up 6.4%
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.