State Street Global Advisors begun trading 2 new ETFS, the Financial services Select Sector SPDR Fund (NYSEArca: XLFS) and the Real Estate Select Sector SPDR Fund (NYSEArca: XLRE) on Thursday, October 8, 2015.
1.
FUND INFORMATION:
| Symbol: XLFS | Exchange: NYSE Arca |
| Name: Financial services Select Sector SPDR Fund | Net Expense Ratio: 0.14% |
FUND OBJECTIVE:
The Financial Services Select Sector SPDR Fund seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of publicly traded equity securities of companies in the Financial Services Select Sector Index.
REFERENCE INDEX:
The Financial Services Select Sector Index includes securities of US companies from the following industries:
diversified financial services; insurance; banks; capital markets; consumer finance; thrifts and mortgage finance; and mortgage real estate investment trusts (mortgage REITs).
Unlike The Financial Select Sector SPDR Fund, the Fund will not invest in companies involved in the real estate industry, with the exception of mortgage REITs, and, therefore, the risk and return profiles of the Fund and The Financial Select Sector SPDR Fund will differ.
The Index is one of 11 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, which means that modifications may be made to the market capitalization weights of single stock concentrations in order to conform to the requirement of the Internal Revenue Code of 1986, as amended.
As of August 31, 2015, the Index was composed of 63 stocks.
Top 10 index companies (10/08/2015):
| Berkshire Hathaway INC-Cl B | 10.38% |
| Wells Fargo & Co | 10.18% |
| JP Morgan Chase & Co | 9.59% |
| Bank Of America Corp | 6.88% |
| Citigroup INC | 6.45% |
| American International Group | 3.16% |
| Goldman Sachs Group INC | 2.93% |
| US Bancorp | 2.89% |
| American Express Co | 2.74% |
| Metlife INC | 2.25% |
Index Sector Allocation (10/08/2015):
| Diversified Banks | 36.31% |
| Multi-Sector Holdings | 10.68% |
| Asset Management & Custody Banks | 8.84% |
| Regional Banks | 7.13% |
| Investment Banking & Brokerage | 6.77% |
| Property & Casualty Insurance | 6.53% |
| Life & Health Insurance | 6.52% |
| Consumer Finance | 5.64% |
| Multi-line Insurance | 4.75% |
| Specialized Finance | 4.38% |
| Insurance Brokers | 2.25% |
| Thrifts & Mortgage Finance | 0.20% |
Useful Links:
XLFS Home Page
Category: Equities> Regions> USA> US Sectors/Industries> US Financials
2.
FUND INFORMATION:
| Symbol: XLRE | Exchange: NYSE Arca |
| Name: Real Estate Select Sector SPDR Fund | Net Expense Ratio: 0.14% |
FUND OBJECTIVE:
The Real Estate Select Sector SPDR Fund seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of publicly traded equity securities of companies in the Real Estate Select Sector Index.
REFERENCE INDEX:
The Real Estate Select Sector Index includes securities of US companies from the following industries:
real estate management and development and real estate investment trusts (REITs),excluding mortgage REITs.
The Index is one of 11 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, which means that modifications may be made to the market capitalization weights of single stock concentrations in order to conform to the requirement of the Internal Revenue Code of 1986, as amended.
As of August 31, 2015, the Index was composed of 25 stocks.
Top 10 index companies (10/08/2015):
| Simon Property Group Inc. | 12.67% |
| American Tower Corporation | 8.41% |
| Public Storage | 6.73% |
| Equity Residential | 5.89% |
| Crown Castle International Corp | 5.72% |
| AvalonBay Communities Inc. | 4.78% |
| Welltower Inc. | 4.51% |
| Prologis Inc. | 4.50% |
| Boston Properties Inc. | 3.98% |
| Ventas Inc. | 3.93% |
Index Sector Breakdown (10/08/2015):
| Specialized REITs | 30.05% |
| Retail REITs | 23.09% |
| Residential REITs | 15.34% |
| Health Care REITs | 12.13% |
| Office REITs | 9.95% |
| Industrial REITs | 4.50% |
| Hotel & Resort REITs | 2.86% |
| Real Estate Services | 2.07% |
Useful Links:
XLRE Home Page
Category:
ETFtrack comment:
In August 2015, S&P Dow Jones Indices (S&P DJI) launched the S&P Real Estate Select Sector Index and S&P Financial Services Select Sector Index. The move came after an annual review of the Global Industry Classification Standard (GICS) in 2014. By splitting the broader financial sector into financial services and real estate, the total number of GICS sectors will increase from 10 to 11. These changes are being implemented at the end of August 2016.
SSGA launched the XLFS and the XLRE to give investors an early start to manage the transition and perform the necessary due diligence, particularly if they adhere to a strict GICS sector benchmark policy within their asset allocation strategies.
Essentially, real estate is being elevated from an industry to form a new stand-alone sector within the GICS classification hierarchy. With this change, there will now be a financial services and a separate real estate sector. Prior to this change, both market segments were captured broadly in benchmarks such as the S&P Financials Select Sector Index, which was launched in 1996 and will remain intact and unadjusted as the index for the current Financial Select Sector SPDR Fund (XLF).