*** Sector SPDRs Begin Trading 12/22/98 ***
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Contact:
Liz Pease
Schofield & Co. for SSgA
(617) 428-0680Dan Noonan / Stephan Pechdimaldji
The Nasdaq-Amex Market Group
(212) 306-1647 / (212) 306-1489
FOR IMMEDIATE RELEASE
State Street Announces New Index Shares to Begin Trading December 22 on the Amex
Nasdaq-Amex to Introduce Options on Select Sector SPDR® Funds December 22nd
Select Sector SPDR® Funds "Unbundle" the S&P 500 Index into Nine Sectors;
Each Can be Bought and Sold Like Shares of Stock
Options on Select Sector SPDR Funds to also trade on December 22
BOSTON, Mass. (December 16, 1998) -- State Street Global Advisors (SSgA) today announced that shares of Select Sector SPDR® Funds --index shares based on nine specific industry sectors comprised of shares of companies in the Standard & Poor's 500 Index®-- will begin trading December 22, 1998 on The American Stock Exchange (Amex).
SSgA, the investment management group of State Street Corporation, will be the investment adviser for the new funds. State Street Bank and Trust Company, with its fully-automated infrastructure will provide legal, compliance, custody and transfer agency services for the funds. Shares of the funds will trade as part of the Amex's Index Share ™ Marketplace.
The Amex today also announced that it will trade options on shares of Select Sector SPDR Funds beginning December 22.
Perform Like Sector Indexes, Trade Like Stocks
Each Select Sector SPDR Fund is designed to track the price performance and dividend yield net of expenses of a particular Select Sector Index. Select Sector SPDR Funds may bear a higher level of risk than more broadly diversified funds.
The nine sectors are Basic Industries, Consumer Services, Consumer Staples, Cyclical/Transportation, Energy, Financial, Industrial, Technology and Utilities.
Douglas T. Holmes, principal of SSgA, said: "These funds provide investors with an affordable way to allocate assets to suit their own objectives, such as investing in a specific sector or utilizing a sector rotation strategy in their portfolios."
While they represent portfolios of underlying stocks, shares of Select Sector SPDR Funds trade like common stock, which means:
•They are priced and traded continuously between 9:30 A.M. and 4:00 P.M. EST on the floor of the Amex. •Holders of Select Sector SPDR Fund shares are entitled to receive quarterly cash payments based upon dividends paid, if any, by the underlying stocks in each Fund. •Shares of Select Sector SPDR Funds can be bought on margin and sold short.
Joseph B. Stefanelli, executive vice president for Derivative Securities at the Amex, commented: "We anticipate these funds will appeal to a variety of investment objectives. While Select Sector SPDRs give investors access to these industry sectors on a minute-by-minute basis, the tax efficiencies of the Index Share structure could make an equally compelling case for the long-term investor."
Lower Cost & Tax Efficiency
Because the Select Sector SPDR Funds are passively managed ("indexed"), they tend to have lower costs. Since they trade like shares of stock, brokerage commissions for purchases and sales will apply.
Select Sector SPDR Funds are also tax efficient. They are expected to have relatively low portfolio turnover thereby reducing the potential for high capital gains distributions.
Participants
The administrator and custodian of the Select Sector SPDR Funds is State Street Bank and Trust Company. The investment adviser is State Street Global Advisors. The value of Select Sector Indexes is calculated by The American Stock Exchange. The distributor for Select Sector SPDR Funds is ALPS Mutual Funds Services, Inc., a registered broker-dealer. Counsel to the Funds is Gordon Altman Butowsky Weitzen Shalov & Wein.
Kathleen C. Cuocolo, senior vice president at State Street, said: "As a recognized leader in administration, accounting, custodial and investment management services, State Street is committed to exchange-traded products and has proven its success with many products including SPDRs. State Street's collaboration with The American Stock Exchange is testament to this."
The ticker symbols and specialist units for the Select Sector SPDR Funds are:
Fund:Symbol:Amex Specialist Unit:Basic Industries SectorXLBKalb, VoorhisConsumer Services Sector XLVSpear, Leeds & KelloggConsumer Staples Sector XLPKalb, VoorhisCyclical/ Transpor- tation Sector XLYSpear, Leeds & KelloggEnergy Sector XLESusquehanna Investment GroupFinancial Sector XLFSpear, Leeds & KelloggIndustrial Sector XLI AGS Specialist Partners/OTA L.P./STR Trading Partners LLC. Technology Sector XLKSusquehanna Investment GroupUtilities Sector XLUAGS Specialist Partners/OTA L.P./STR Trading Partners LLC.
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For Immediate Release
December 21, 1998
Media Contact
Dan Noonan
(212) 306-1647
Nasdaq-Amex to Introduce Options on Select Sector SPDR® Funds December 22nd
New York, NY—The Nasdaq-Amex Market Group today announced it will introduce options on Select Sector SPDR® Funds beginning December 22, 1998. These options will trade on The American Stock Exchange as Index ShareSM options, which combine the ease of trading equity options with the diversity of an index.
State Street Global Advisors (SSgA) previously announced that the underlying shares of Select Sector SPDR Funds will also begin trading on the Amex December 22nd.
Options on Select Sector SPDR Funds represent a unique opportunity for investors to trade share-settled options based on the performance of sector index funds. Select Sector SPDR Funds are Index Shares based on nine specific industry sectors comprised of shares of companies in the Standard & Poor's 500 Index®. Each Select Sector SPDR Fund is designed to track the price performance and dividend yield net of expenses of a particular Select Sector Index. The nine sectors are Basic Industries, Consumer Services, Consumer Staples, Cyclical/Transportation, Energy, Financial, Industrial, Technology and Utilities.
"Options on Select Sector SPDRs complement shares of the Funds, providing investors with the ability to manage risk with a product that is as easy to use as any other equity option," said Joseph B. Stefanelli, executive vice president of Derivative Securities for The American Stock Exchange.
Options on Select Sector SPDR Funds allow investors to fine-tune the performance of investments in Select Sector SPDR Funds, using numerous strategies ranging from highly conservative to highly aggressive. Options can be used to protect holdings, or to seek profits in an expected stock market move. Regular options, LEAPS® (Long-term Equity AnticiPation Securities®) and E-FLEX (customized) options will all be offered on Select Sector SPDR Funds. [Note: For general information on options trading, visit www.amex.com/floor and click "Using Options & Derivatives" on the top banner.]
Fund NameFund & Option SymbolOptions SpecialistBasic Industries SectorXLBSpear, Leeds & KelloggConsumer Services SectorXLVAGS Specialist Partners/OTA L.P./STR Trading Partners LLCConsumer Staples SectorXLPCharlton/SLKCyclical/ Transpor- tation SectorXLYCohen, Duffy & McGowan, Inc.Energy SectorXLEKalb VoorhisFinancial SectorXLFSusquehanna Investment GroupIndustrial SectorXLISusquehanna Investment GroupTechnology SectorXLKSpear, Leeds & KelloggUtilities SectorXLULETCO-Specialist, L.P.
The Nasdaq-Amex Market Group is home to Index Shares SM, which include: SPDRs® (Standard & Poor's Depositary Receipts®) based on the S&P 500 Index; MidCap SPDRsTM (Standard & Poor's MidCap 400 Depositary ReceiptsTM) based on the S&P MidCap 400 Index; Select Sector SPDR Funds based on nine industry sectors; DIAMONDSSM based on the Dow Jones Industrial AverageSM; and WEBSSM (World Equity Benchmark SharesSM) based on 17 different Morgan Stanley Capital International country indexes. Index Shares trade on The American Stock Exchange.
The Nasdaq-Amex Market GroupSM, which operates The Nasdaq Stock Market® and The American Stock Exchange®, is a subsidiary of the National Association of Securities Dealers, Inc. (NASD®), the largest securities-industry, self-regulatory organization in the United States. The union of Nasdaq® and Amex® creates the world's first financial market that brings together central auction specialist and multiple Market Maker systems.
The Amex trades options on 30 broad-based and sector indexes and 1,083 domestic and foreign stocks, as well as Long-term Equity AnticiPation Securities® (LEAPS®) on 117 stocks. Amex is a leader in listing warrants on foreign currencies and indexes, hybrid instruments and other structured products.
For more information about Nasdaq-Amex, visit the Nasdaq-Amex Web site at nasdaq-amex.com or the Nasdaq-Amex NewsroomSM at nasdaq-amexnews.com.
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