State Street last Thursday (9/29/2011) announced three new SPDR Select Industry ETFs to track the performance of related S&P Select Industry Indexes. The new offerings are the SPDR S&P Aerospace & Defense ETF (XAR), SPDR S&P Health Care Services ETF (XHS), and SPDR S&P Software & Services ETF (XSW).
SPDR Select Industry ETFs differ from the extremely popular Select Sector SPDRs in three major areas:
- Classification – both series are based on the Global Industry Classification Standard (GICS). The Select Sector series targets the top level of 10 major sectors, while the Select Industry series looks at more narrowly defined groups (“sub-industries” in GICS terminology).
- Universe – the Select Sectors are limited to stocks in the S&P 500, while the Select Industry series stocks are members of the S&P Total Market Index, which includes all common equities listed on the NYSE and NASDAQ exchanges.
- Weighting – the Select Sectors use traditional market cap weighting, while most of the Select Industry series takes an equal weight approach.
With these new products, plus the three launched in January, the quantity of ETFs in the SPDR Select Industry lineup (pdf) now totals 20. The series has 15 equal weight funds, including the three new additions, and five others that use market cap weighting. The three newly announced ETFs all have an expense ratio of 0.35%, and they share a common prospectus (pdf) with the rest of the series.
SPDR S&P Aerospace & Defense ETF (XAR) tracks an underlying index that began on 7/1/2006 and currently holds 34 stocks. Constituents include manufacturers of civil or military aerospace and defense equipment, parts or products, including defense electronics and space equipment. XAR overview and fact sheet (pdf).
SPDR S&P Health Care Services ETF (XHS) tracks an underlying index that began on 7/1/2006 and holds 57 stocks. Constituents include providers of patient health care services, including dialysis centers, lab testing services, pharmacy management services, and companies providing business support services to health care providers. XHS overview and fact sheet (pdf).
SPDR S&P Software & Services ETF (XSW) tracks a new index that began on 9/19/2011 and holds 112 stocks. It includes companies engaged in the research, design, support production, or distribution of products or processes that relate to software applications, software and internet systems, and information-based services. XSW overview and fact sheet (pdf).
Disclosure covering writer, editor, and publisher: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.