Index investing can be easy and transparent, as many investors understand, but how to focus on segments of the market in a passive manner can be a bigger challenge.
The Sector SPDR ETFs suite brings an answer to the table with 11 sector ETFs that allow flexibility and diversification. Sector SPDR ETFs are the only ETFs that divide the S&P 500 into 11 investable sectors. These ETFs have all broad segments of the market covered.
Exchange-traded funds have become a go-to tool for advisors and investors of every kind, from the institutional to the retail do-it-yourself investor. And beyond broadly investing in the Dow Jones Index, Nasdaq, and the S&P 500, these ETFs offer access to industries that allow investors to mix and match sectors by overweighting and underweighting certain sectors, such as energy during an industry boom in an upcycle and financials falling as the economy slows.
Using the Global Industry Classification Standard (GICS), the SPDR ETF Funds bring an easy-to-understand approach to sector investing.
Here is the lineup:
Communication Services Select Sector SPDR Fund (XLC)
Consumer Discretionary Select Sector SPDR Fund (XLY)
Consumer Staples Select Sector SPDR Fund (XLP)
Energy Select Sector SPDR Fund (XLE)
Financials Select Sector SPDR Fund (XLF)
Health Care Select Sector SPDR Fund (XLV)
Industrials Select Sector SPDR Fund (XLI)
Materials Select Sector SPDR Fund (XLB)
Real Estate Select Sector SPDR Fund (XLRE)
Technology Select Sector SPDR Fund (XLK)
Utilities Select Sector SPDR Fund (XLU)
This suite of ETFs provides index investing in a more focused manner, or a way to cover the entire market using different weightings, depending on market momentum and individual investor goals.
Taking the U.S equity market and breaking it down into clear and simple investment focus areas is the beauty of these ETFs.
Diversification is a key ingredient to any portfolio. How to achieve that can be tricky. Broad market exposure can be achieved more thoughtfully using the Sector SPDR ETFs to accomplish that goal. And by drawing from the S&P 500 for its equities, the funds are built by well-known, large cap companies.
The machinations of the market will always be unpredictable. However, having a broad exposure through segmented industries allows flexibility without having to pick a winner by single stock. Each individual will have different goals, but using the sector ETFs above will allow for diversification and customization.
DISCLAIMER: This is a work of research and should not be taken as investment or financial advice. Therefore, Select Sector SPDRs or the publisher is not liable for any decision made based on the publication.
About the Company:
Select Sector SPDR ETFs offer flexibility and customization opportunities. Many investors have similar outlooks, but no two are exactly alike. Select Sector SPDR ETFs let investors select the sectors that best meet their investment goals.
Ordinary brokerage fees apply
The S&P 500 Index is an unmanaged index of 500 common stocks that is generally considered representative of the U.S. stock market. The index is heavily weighted toward stocks with large market capitalizations and represents approximately two-thirds of the total market value of all domestic common stocks. The S&P 500 Index figures do not reflect any fees, expenses or taxes. An investor should consider investment objectives, risks, fees and expenses before investing.
One may not invest directly in an index.
Transparent Funds provide daily disclosure of portfolio holdings and weightings
All ETFs are subject to risk, including loss of principal. Sector ETF products are also subject to sector risk and nondiversification risk, which generally will result in greater price fluctuations than the overall market. Diversification does not eliminate risk.
An investor should consider investment objectives, risks, charges and expenses carefully before investing. To obtain a prospectus, which contains this and other information, call 1-866-SECTOR-ETF (732-8673) or visit www.sectorspdrs.com. Read the prospectus carefully before investing.
ALPS Portfolio Solutions Distributor, Inc., a registered broker-dealer, is distributor for the Select Sector SPDR Trust.
Company: Select Sector SPDRs
Contact: Dan Dolan*
Address: 1290 Broadway, Suite 1000, Denver, CO 80203
Country: United States
*Dan Dolan is a Registered Representative of ALPS Portfolio Solutions Distributor, Inc. ALPS Portfolio Solutions Distributor, Inc., a registered broker-dealer, is the distributor for the Select Sector SPDR Trust.
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