Arachnophobics need not be scared of these spiders; they're just the pet name for the SPDR trust, an exchange-traded fund that mimics the S&P 500. Share of the spider trade on the AMEX under the symbol SPY.
Spiders/SPDRs are a family of exchange-traded funds that track stocks within the S&P 500 index. As ETFs, Spider shares can be traded throughout the day, like shares of a typical stock. (Mutual funds, in comparison, are bought and sold only at the end of each trading day.) The SPDR Trust, Series 1, is the unit investment trust that issues the Standard & Poor's Depositary Receipts. The main Spider -- (AMEX: SPY) -- includes shares of all of the stocks in the S&P 500. SPY was created in 1993, and is listed as the first exchange-traded fund.
There are nine Sector Select SPDR funds (ETFs) that cover the full list of S&P 500 stocks:
- Consumer Discretionary
- Consumer Staples
- Health Care
Other Spiders with other tickers correspond to subsets of the S&P 500: the SPDR Gold Shares (NYSE: GLD) and SPDR Homebuilders (NYSE: XHB), for instance. State Street Global Advisors manages the SPDR funds. SPDRs are not part of Standard and Poor's.
As the SPDR trust is a pool of money managed to perfectly mimic the Standard and Poor's 500 Composite Stock Price Index, the price of a unit in the trust is always the current value of the S and P 500 divided by 10.
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