Investing in SPDRs

SPDR is Standard and Poor's Depositary Receipt. SPDRs are traded on the American Stock Exchange under the ticker symbol SPY. They trade at 1/10th of the value of the S&P 500. Owners of these funds get dividends once every quarter.

There a 9 Select Sector SPDRs that represent the S&P 500 as a whole. However, an investor is also able to buy any Select Sector SPDR individually as well. This enables the investor to get wide exposure to a particular sector or industry group. Select Sector SPDRs enable the investor to achieve the security of investing in popular & well known and large cap stocks of the S&P 500. They have the ability to over-weight or under-weight particular sectors based on specific investment goals and strategies.

9 Select Sector funds are as follows.

• The Consumer Discretionary Select Sector SPDR Fund
• The Consumer Staples Select Sector SPDR Fund
• The Energy Select Sector SPDR Fund
• The Financial Select Sector SPDR Fund
• The Health Care Select Sector SPDR Fund
• The Industrial Select Sector SPDR Fund
• The Materials Select Sector SPDR Fund
• The Technology Select Sector SPDR Fund
• The Utilities Select Sector SPDR Fund

Select Sector SPDRs are unique ETFs that divide the S&P 500 into 9 sector index funds. Because of these funds, an investor is able to customize his or her investments by making a choice from this wide array of sectors to meet the specific investment goals. There are many advantages of these SPDRs. They are as diverse as mutual funds, as focused as a sector fund, and can also be traded like a stock. Another big advantage is that, the Select Sector SPDRs can be bought and sold (that is traded) throughout the trading day.

Benefits of Select Sector SPDRs

SPDRs enable a person to invest in any or all nine sectors of the S&P 500. They help an investor to reduce portfolio risks. Increases flexibility. Since SPDRs can be traded like stocks, they can be bought and sold at any time throughout the trading day, unlike most mutual funds, which execute buy and sell orders only at each day's 4 p.m. closing price. Helps an investor to minimize expenses.